STOCK AND ASSET PURCHASE AGREEMENT
Dated as of January 15, 1999
By and Among
PICCADILLY CAFETERIAS, INC.,
PICCADILLY RESTAURANTS, INC.
and
XXXX INVESTMENT COMPANY, INC.
STOCK AND ASSET PURCHASE AGREEMENT
STOCK AND ASSET PURCHASE AGREEMENT (the "Agreement"), dated as of
January 15, 1999, by and among Piccadilly Cafeterias, Inc., a Louisiana
corporation ("Piccadilly"), Piccadilly Restaurants, Inc., a Louisiana
corporation, ("Restaurants" and together with Piccadilly, the "Sellers"),
and Xxxx Investment Company, Inc., a Delaware corporation (the "Buyer").
W I T N E S S E T H:
WHEREAS, Sellers own certain assets principally used in the operation
of seven Xxxxx & Kacoo's seafood restaurants (the "Business"); and
WHEREAS, Piccadilly owns 98 shares of common stock, no par value per
share, of Cajun Bayou Distributors and Management, Inc., a Louisiana
corporation ("Bayou"), which constitutes all of the issued and outstanding
capital stock of Bayou (the "Shares"), and Bayou owns certain intellectual
property, inventory, franchisor rights and a warehouse and distribution
facility used exclusively in the operation of the Business; and
WHEREAS, Sellers desire to sell the assets used exclusively in the
operation of the Business, including the Shares, other than certain
specified assets, and to transfer certain specified obligations and
liabilities of Sellers incurred in connection with the ownership and
operation of the Business; and
WHEREAS, Buyer desires to acquire such assets and the Shares and is
willing to assume such specified obligations and liabilities on the terms
and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the representations, warranties,
covenants and agreements herein contained, the parties hereto agree as
follows:
SECTION 1. DEFINITIONS
For all purposes of this Agreement, except as otherwise expressly
provided or unless the context otherwise requires, each of the following
terms shall have the meanings set forth below:
An "Affiliate" means, with respect to any Person, any other Person
that, directly or indirectly, through one or more intermediaries, controls,
has the right to control (in fact or by agreement), is controlled by, or is
under common control with, such Person.
"Benefit Arrangement" shall mean any employment, severance or similar
contract, or any other contract, plan, policy or arrangement providing for
compensation, bonus, profit-sharing, stock option or other stock related
rights or other forms of incentive or deferred compensation, insurance
coverage (including any self-insured arrangement), health or medical
benefits, disability benefits, and post-employment and retirement benefits,
other than Employee Plans.
"Business Financial Statements" shall mean the unaudited balance
sheets as of June 30, 1998, and the related unaudited statements of
earnings of the Business, as of and for the years ended June 30, 1996, 1997
and 1998, and the unaudited balance sheet as of September 30, 1998 and the
related unaudited statement of earnings of the Business for the three
months ended September 30, 1998, which are attached hereto as Exhibit A.
The "Business Latest Balance Sheet" means the balance sheet of
Business as of September 30, 1998 that is included among the Business
Financial Statements.
The "Closing" means the closing of the Stock and Asset Sale.
The "Closing Date" means the date upon which the Closing occurs.
The "Closing Date Working Capital" means the Working Capital of the
Business as of the Closing Date.
The "Closing Date Working Capital Statement" has the meaning specified
in Section 2.9.
The "Closing Payment" means the payment made by Buyer to Sellers at
Closing consisting of a cash payment in the amount of $21,076,613 plus or
minus the amount by which the Estimated Working Capital exceeds or is less
than the Working Capital of the Business reflected on the Business Latest
Balance Sheet.
The "Code" means the Internal Revenue Code of 1986, as amended.
"Confidentiality Agreement" means that certain Confidentiality
Agreement dated October 14, 1998, and as amended on December 2, 1998, by
and between Buyer and Southcoast Capital L.L.C., as financial advisor to,
and on behalf of, Piccadilly.
"Current Assets" means any and all assets of the Business that are
categorized as such on the Business Latest Balance Sheet or the Closing
Date Working Capital Statement, as the case may be, including, but not
limited to, accounts receivable, inventory and prepaid expenses.
"Current Liabilities" means any liabilities of the Business listed on
the Business Latest Balance Sheet or the Closing Date Working Capital
Statement, as the case may be, other than Intercompany Indebtedness (which
will be eliminated at Closing in accordance with Section 2.7 hereof).
"Descriptive Memorandum" means the Confidential Descriptive Memorandum
of the Business dated September 1998.
"Effective Time" means 12:00 midnight on the Closing Date.
"Employee Plan" means (a) a plan or arrangement as defined in Section
3(3) of ERISA that (i) is maintained, administered or contributed to by
Bayou, Sellers or any ERISA Affiliate or (ii) covers any employee or former
employee of Bayou, Sellers or any ERISA Affiliate, and (b) a plan or
arrangement as defined in Section 3(37) and Section 4001(a)(3) of ERISA
that covers, or covered at any time during the five year period prior to
the Closing Date, any employee or former employee of Bayou, Sellers or any
ERISA Affiliate.
"Environmental Claim" refers to any complaint, summons, citation,
notice, directive, order, claim, litigation, investigation, judicial or
administrative proceeding, judgment, letter or written communication from
any governmental agency, department, bureau, office or other authority, or
any third party involving violations of Environmental Laws or Releases of
Hazardous Materials from (i) any assets, properties or businesses of the
Business; (ii) adjoining properties or businesses onto properties of the
Business or (iii) onto any facilities which received Hazardous Materials
generated by the Business.
"Environmental Laws" mean the Comprehensive Environmental Response,
Compensation and Liability Act ("CERCLA") 42 USC 9601 et seq., as amended;
the Resource Conservation and Recovery Act ("RCRA"), 42 USC 6901, et seq.,
as amended; the Clean Air Act ("CAA"), 42 USC 7401, et seq., as amended;
the Clean Water Act ("CWA") 33 USC 1251, et seq., as amended; the
Occupational Safety and Health Act ("OSHA"), 20 USC 655, et seq., as
amended; and any other federal, state, local or municipal laws, statutes,
regulations, rules, or ordinances imposing liability or establishing
standards of conduct for the protection of the environment, human health
and safety.
"Environmental Liabilities" mean any monetary obligations, losses,
liabilities (including strict liability), damages, punitive damages,
consequential damages, treble damages, costs and expenses (including all
reasonable out-of-pocket fees, disbursements and expenses of counsel, out-
of-pocket expert and consulting fees and out-of-pocket costs for
environmental site assessments, remedial investigation and feasibility
studies), fines, penalties, sanctions and interest incurred as a result of
any Environmental Claim filed by any governmental authority or any third
party which relate to any violations of Environmental Laws, Remedial
Actions, Releases or threatened Releases from or onto (i) any property
owned or leased by Bayou or Sellers and used in the Business or (ii) any
facility which received Hazardous Materials generated by Bayou or Sellers
and used in the Business.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"ERISA Affiliate" means any Person within the "controlled group" of
corporations with respect to Bayou or Sellers, as defined in Section 414(b)
of the Code and the regulations promulgated thereunder, and all trades or
businesses that are under "common control" with respect to Bayou or
Sellers, as defined in Section 414(c) of the Code and the regulations
promulgated thereunder.
"Estimated Working Capital" means the estimate of the Working Capital
of the Business that is set forth in the Estimated Working Capital
Statement, it being understood that the Estimated Working Capital will be
stated as of the last day of the calendar month immediately preceding the
Closing Date (or, if the Closing is held before the tenth day of a month,
as of the last day of the second preceding month), adjusted for any
subsequent extraordinary items.
"Estimated Working Capital Statement" means the statement prepared by
Sellers and delivered to Buyer pursuant to and in accordance with Section
2.8 and 2.10 hereof.
"Final Adjustment" means the adjustment provided for in Section 2.9
hereof.
"GAAP" means generally accepted accounting principles, consistently
applied.
"Hazardous Materials" means (a) any element, compound, or chemical
that is defined, listed or otherwise classified as a contaminant,
pollutant, toxic pollutant, toxic or hazardous substance, extremely
hazardous substance or chemical, hazardous waste, medical waste,
biohazardous or infectious waste, special waste, or solid waste under
Environmental Laws; (b) petroleum, petroleum-based or petroleum-derived
products; (c) polychlorinated biphenyls; (d) any substance exhibiting a
hazardous waste characteristic including but not limited to corrosivity,
ignitability, toxicity or reactivity as well as any radioactive or
explosive materials; and (e) any raw materials, building components,
excluding lead-based paint but including regulated asbestos-containing
materials and manufactured products containing Hazardous Materials.
"Indebtedness" means all obligations of the Business (whether for
principal, interest, premium, fees or otherwise) for or arising under (i)
all indebtedness for borrowed money (including all notes payable and all
obligations evidenced by bonds, debentures, notes or other similar
instruments but excluding Intercompany Indebtedness), (ii) unpaid
reimbursement obligations arising in connection with guaranties, or (iii)
any lease obligation that would be required to be capitalized in accordance
with GAAP.
"Intercompany Indebtedness" means (i) the entire net Indebtedness owed
or owing as of the Closing Date by Bayou to Piccadilly or any subsidiary of
Piccadilly, (ii) any tax liability of Bayou that is required to be paid by
Piccadilly pursuant to Section 9.6, or (iii) any other liability,
obligation or commitment of Bayou to Piccadilly or any subsidiary of
Piccadilly as of the Closing Date.
"Knowledge of Sellers" means actual knowledge of the chief executive
officer or chief financial officer of Piccadilly.
A "Lien" means, with respect to the Shares or any asset of the
Business, any title defect, lien, mortgage, easement, pledge, charge,
transfer restriction, right of first refusal, preemptive right, option,
claim, security interest, right of others or other encumbrance of any
nature whatsoever, other than restrictions imposed by federal or state
securities laws.
A "Material Adverse Effect" means a material adverse effect on the
results of operation or financial condition of the Business, or any
material limitation on the ability of the Sellers to consummate the Stock
and Asset Sale.
"Permits" shall have the meaning specified in Section 4.15.
A "Permitted Lien" means (i) Liens consisting of zoning or planning
restrictions, easements, permits and other restrictions or limitations on
the use of real property that in the aggregate do not materially detract
from the value or interfere with the use of such real property or
materially impair the marketability thereof, (ii) Liens for current taxes
or assessments on property that are accrued but not yet payable, and (iii)
mechanic's, materialman's and other liens for goods and services
incorporated into or provided with respect to the property encumbered
thereby arising by operation of law in the ordinary course of business,
provided that the obligations secured by such Liens (A) are not more than
30 days past due, (B) are fully reflected in the Business Latest Balance
Sheet or the Closing Date Working Capital Statement and (C) do not
materially interfere with the use or enjoyment of any of the Business'
properties or assets and do not materially impair the marketability
thereof.
"Person" means any natural person, corporation, partnership, limited
liability company, trust and any other entity or organization of any kind,
including governmental or political subdivisions or agencies or
instrumentalities thereof.
"Purchase Price" means the Closing Payment plus or minus any amount
paid by Buyer to Sellers, or Sellers to Buyer, pursuant to Section 2.9,
together with the assumption by the Buyer of the Assumed Liabilities and
Buyer's allocated portion of the Shared Liabilities.
"Release" means any spill, leak, emission, discharge, pump, empty,
injection, escape, leaching, migration, dumping or disposal of Hazardous
Materials (including the abandonment or discarding of barrels, containers
or other closed receptacles containing Hazardous Materials) into the
environment.
"Remedial Action" means all actions taken to (i) clean up, remove,
remediate, contain, treat, monitor, assess, evaluate or in any other way
address Hazardous Materials in the indoor or outdoor environment, (ii)
prevent or minimize a Release or threatened Release of Hazardous Materials
so they do not migrate or endanger or threaten to endanger public health or
welfare or the indoor or outdoor environment, (iii) perform post-remedial
operation and maintenance activities, or (iv) any other actions authorized
by 42 U.S.C. 9601.
"Returns" means all returns, declarations, reports, statements and
other documents required to be filed in respect of Taxes, and the term
"Return" means any one of the foregoing.
"Sellers' Group" means, individually and collectively, Piccadilly,
Bayou, Restaurants or any other Person as to which Bayou is liable for
Taxes incurred by such Person either as a transferee, pursuant to U.S.
Treasury Regulations Section 1.1502-6, or pursuant to any other provision
of federal, state, local or foreign law or regulation or otherwise.
The "Stock and Asset Sale" means the sale of the Shares by Piccadilly
and the sale of assets of the Business by Sellers to the Buyer in
accordance with this Agreement.
"Taxes" means all federal, state, local, foreign or other net income,
gross income, gross receipts, sales, use, ad valorem, transfer, franchise,
property, withholding or other taxes, fees, assessments or charges of any
kind whatever, together with any interest and any penalties, additions to
tax or additional amounts with respect thereto, and the term "Tax" means
any one of the foregoing.
"Transition Services Agreement" means the agreement between Buyer and
Piccadilly that is required to be delivered at Closing pursuant to Section
7.1(d) hereof.
"Working Capital" means the amount, if any, by which the Business'
Current Assets exceed its Current Liabilities.
SECTION 2. PURCHASE AND SALE; CONDITION OF ASSETS
2.1 PURCHASE AND SALE OF SHARES. Subject to the terms and
conditions hereof, at the Closing Piccadilly will sell to Buyer, and Buyer
will purchase from Piccadilly, the Shares, free and clear of all Liens.
2.2 ASSETS CONVEYED. Upon the terms and subject to the conditions
set forth in this Agreement, at the Closing Sellers shall convey, sell,
transfer and deliver to Buyer and Buyer shall purchase, acquire and accept
from Sellers, all right, title and interest of Sellers in and to all
assets, properties and rights of Sellers of every kind, nature and
description, corporeal or incorporeal, tangible or intangible, wherever
located, used by Sellers exclusively in connection with the operation of
the Business (collectively, the "Acquired Assets"), but excluding those
assets, properties and rights specified in Section 2.3. The Acquired
Assets include, but are not limited to:
(a) The immovable property of the Business that is listed
and described on Schedule 4.6(a)(i) together with all buildings, structures
and improvements located thereon and fixtures attached thereto and all
rights, ways, privileges and servitudes attendant thereto (the "Immovable
Property");
(b) All rights and interests of the Sellers under the real
property leases listed and described on Schedule 4.6(a)(iii) (the "Real
Property Leases");
(c) All machinery, equipment, furniture, supplies, tools,
vehicles, spare parts and other movable assets of the Business, including,
without limitation, those assets listed and described on Schedule
4.6(a)(ii) (collectively, the "Equipment");
(d) All inventory of the Business, including, without
limitation, foodstuffs, staples and utensils;
(e) All claims and rights of the Sellers under all
agreements, contracts, leases (other than Real Property Leases), evidences
of indebtedness, purchase and sale orders and other executory contracts and
commitments of Sellers to the extent they relate exclusively to the
Business, including without limitation those listed on Schedule 4.7 (the
"Contracts");
(f) All claims and rights of the Sellers under all licenses,
permits, consents, use agreements, approvals, authorizations and
certificates of any regulatory, administrative or other governmental agency
or body to the extent they relate exclusively to the Business, in each case
to the extent transferable by Sellers, including without limitation those
listed on Schedule 4.15 (the "Licenses and Permits");
(g) All rights and interests of Sellers arising under any
claim or potential claim against any person, whether arising under contract
rights, subrogation rights or at law or equity, including, without
limitation, all claims against suppliers, customers and insurance
underwriters and brokers, in each case only to the extent they arise out of
or relate exclusively to the Business and based on facts or circumstances
occurring after the Closing Date;
(h) All accounts receivable of the Business;
(i) Originals or duplicate copies, to the extent in
existence, of all property tax records and supporting schedules, drawings,
plans, blueprints, files, papers and all other records, including those
maintained on magnetic tape or microfiche format, other than employee
personnel records, relating exclusively to the Acquired Assets or the past
or present operations of the Business, it being understood by Buyer that it
may not be possible to segregate certain records from Piccadilly's records
but that copies of information set forth in such records as it relates
exclusively to the Acquired Assets or the Business shall be provided to the
Buyer;
(j) Except as otherwise set forth in Section 2.3 and to the
extent transferrable by Sellers, all personal computer hardware units and
personal computer software computer programs that have been developed by
third parties and are used exclusively in the Business, including, without
limitation, those listed on Schedule 4.6(a)(ii);
(k) All of Sellers' or Bayou's intellectual property
relating exclusively to the Business or the Acquired Assets, including,
without limitation, recipes, trade secrets, trademarks and trade names,
trademark and trade name registrations, service marks and service xxxx
registrations, copyrights, copyright registrations, the applications
therefor and all rights of Sellers or Bayou as licensee under licenses, to
the extent transferable, relating to such intellectual property, together
with all of the goodwill appurtenant thereto, including without limitation
the intellectual property listed on Schedule 4.8;
(l) All catalogues, brochures, sales literature, promotional
material and other sales material of the Business (the "Promotional
Materials"); and
(m) All of Sellers' or Bayou's franchisee rights, franchisor
rights and purchased goodwill relating exclusively to the Business.
2.3 EXCLUDED ASSETS. Notwithstanding the provisions of Section
2.2 hereof, the Acquired Assets do not include the following (the "Excluded
Assets"):
(a) Cash;
(b) All of Sellers' right, title and interest to properties
and assets other than the properties and assets conveyed pursuant to
Section 2.2;
(c) All claims or rights of Sellers, if any, against third
parties based on facts or circumstances occurring prior to the Closing Date
other than the accounts receivable of the Business transferred pursuant to
Section 2.2(h);
(d) All insurance policies of Sellers and rights thereunder,
including rights to any cancellation value on the Closing Date;
(e) Rights of the Sellers to the refund of any federal or
state income tax, ad valorem real estate or property tax, and any other
similar tax that was paid prior to the Closing Date, subject to Section
2.6(c), and the benefit, if any, of net operating loss carry-forwards or
carry-backs of the Sellers;
(f) All assets related to any pension, profit sharing, stock
bonus, stock option, thrift or other retirement plan, medical,
hospitalization, dental, life, disability, vacation or other insurance or
benefit plan, employee stock ownership plan, deferred compensation, stock
ownership, stock purchase, bonus, benefit or other incentive plan,
severance plan or other similar plan relating to the Sellers or their
employees;
(g) All marks or other intellectual property of the Sellers
other than those marks described on Schedule 4.8 but including, without
limitation, any and all trademarks or service marks, trade names, slogans
or other like property relating to or including the names "Piccadilly
Cafeterias," "Piccadilly Restaurants," "Piccadilly," "Xxxxxxxx
Restaurants," "Xxxxxxxx" and all derivations, variations and abbreviations
thereof; and
(h) Any other assets that are identified on Schedule 2.3(h).
2.4 ASSUMPTION OF SPECIFIED LIABILITIES. Except as otherwise
provided in this Agreement, subject to and in accordance with the terms and
provisions of this Agreement, at the Closing Buyer will assume only the
following liabilities (collectively, the "Assumed Liabilities"):
(a) All payment and performance obligations of the Business
arising after the Closing Date under the Contracts, the Real Property
Leases, and the Licenses and Permits;
(b) All liabilities of the Business reflected on the Closing
Date Working Capital Statement;
(c) The monetary liability for any accrued and unused
vacation benefits of employees employed by Sellers or Bayou in the Business
on the Closing Date;
(d) All liabilities and obligations of the Business for any
federal, state, parish or local taxes that are incurred by the Business
after the Closing Date (including but not limited to sales and gross
receipts, income, ad valorem, franchise, use, excise, employment and
payroll taxes);
(e) All liabilities and obligations of the Business that
arise out of, result from or relate to personal injury or property damage
arising out of or related to an act, omission or occurrence after the
Closing Date;
(f) All liabilities and obligations of the Business that
arise out of, result from, or relate to, any violation of any applicable
law, statute, ordinance, regulation or other governmental requirement after
the Closing Date, to the extent that such liabilities or obligations are
attributable to actions taken or events occurring after the Closing Date;
and
(g) All other indebtedness, liabilities or obligations of
the Business to the extent they arise out of or are related to an event,
omission, act or occurrence that occurs after the Closing Date.
2.5 EXCLUDED LIABILITIES. Except as set forth in Section 2.6,
Buyer shall not assume and shall not be responsible for any liabilities,
obligations or commitments of Sellers other than the Assumed Liabilities
(the "Excluded Liabilities").
2.6 SHARED LIABILITIES. The following liabilities and obligations
relating to the Business and the Acquired Assets (the "Shared Liabilities")
shall be shared between Buyer and Sellers as follows:
(a) With respect to utility charges that relate to billing
periods beginning before the Closing Date and ending after the Closing
Date, the responsibility for payment shall be prorated between the parties
on the basis of measured utility usage before and after the Effective Time
(if meter or other measured service readings are made at or near such time)
or otherwise on the basis of the proportional number of calendar days in
the relevant billing period before and after the Closing Date,
respectively;
(b) With respect to rentals payable on the Real Property
Leases and Contracts that relate to lease or contract periods beginning
before and ending after the Closing Date, the responsibility for payment
will be allocated between the parties on the basis of the proportional
number of calendar days in the relevant lease period before and after the
Closing Date, respectively; and
(c) With respect to ad valorem property, real estate and
similar taxes for the applicable tax year, the responsibility for payment
will be allocated between the parties on the basis of the proportional
number of calendar days in the relevant tax year before and after the
Closing Date, respectively.
Except as provided below, if either party pays all or any portion of
the Shared Liabilities for which the other party is entirely or partially
responsible hereunder, then the responsible party will promptly (but in no
event later than 30 days after demand by the paying party) reimburse the
paying party for that payment, provided that any demand for reimbursement
shall be accompanied by appropriate evidence of payment thereof.
2.7 INTERCOMPANY INDEBTEDNESS. At the Closing, Piccadilly will make
a capital contribution to Bayou in an amount equal to the Intercompany
Indebtedness at the time of the contribution thereby eliminating the
Intercompany Indebtedness.
2.8 CONSIDERATION. Upon the terms and subject to the conditions
contained in this Agreement, in consideration of and payment for the
Acquired Assets and the Shares, at the Closing Buyer shall (a) assume the
Assumed Liabilities and Buyer's portion of the Shared Liabilities, and (b)
pay to Sellers the amount of the Closing Payment (such payment to be made
in the manner specified in Section 3.2 hereof). To facilitate the
calculation of the Closing Payment, Sellers shall deliver to Buyer not less
than three days in advance of the Closing Date the Estimated Working
Capital Statement, which statement shall reflect the Estimated Working
Capital.
2.9 FINAL ADJUSTMENT
(a) As soon as practicable, but in no event later than 60
days following the Closing Date, Sellers shall determine the Business'
Closing Date Working Capital and Buyer shall afford Sellers, or its
representatives reasonable access to the books, records and personnel of
the Business for the purpose of making such determination. Within such 60-
day period Sellers shall deliver to Buyer a written statement (the "Closing
Date Working Capital Statement") setting forth its determination of the
Closing Date Working Capital. If Buyer objects to the Closing Date Working
Capital Statement, such objection shall be made in writing and delivered to
Sellers within 15 days following Buyer's receipt of the Closing Date
Working Capital Statement, failing which such statement shall be deemed to
have been accepted by Buyer. Any objections that are not resolved between
Sellers and Buyer within 15 days following Sellers' receipt of Buyer's
statement of objections shall be submitted to binding arbitration to be
conducted by a representative of Ernst & Young LLP, which shall represent
Sellers, a representative of Wilson, Price, Xxxxxxxx, Xxxxxxxxxxx &
Xxxxxxxxxxx, P.C., which shall represent Buyer, and another nationally
recognized accounting firm mutually acceptable to Buyer and Sellers and
selected within 30 days of the date of the submission of the statement of
objections. The fees of each accounting firm representative shall be paid
by the party that it represents, and responsibility for payment of the fees
of the third accounting firm shall be divided equally between Buyer and
Sellers. Such arbitrating body shall make its determination (which
determination shall be made by majority vote) within 90 days of the date
the objections are first submitted for arbitration, and such determination
shall be final, non-appealable and binding upon the parties.
(b) If the Closing Date Working Capital determined pursuant
to Section 2.9(a) exceeds the Estimated Working Capital, then Buyer shall,
within five business days of the earlier of the date that Buyer accepts the
Closing Date Working Capital Statement or any disputes with respect to the
Closing Date Working Capital Statement have otherwise been resolved (the
"Acceptance Date"), pay Sellers in cash the amount of such excess. If the
Closing Date Working Capital determined pursuant to Section 2.9(a) is less
than the Estimated Working Capital, Sellers shall, within five business
days of the Acceptance Date, pay Buyer in cash the amount of such
deficiency. Interest shall accrue and be due with respect to any payments
due by one party to the other hereunder at the rate of 7% per annum
beginning on the 91st day following the Closing Date, and any such payments
(including any interest accrued thereon) shall be made by bank wire
transfer of immediately available funds to an account specified in writing
by payee to payor.
2.10 BASIS OF PREPARATION OF WORKING CAPITAL STATEMENTS. Sellers
agree that in preparing the Estimated Working Capital Statement and Closing
Date Working Capital Statement, they shall determine the Current Assets and
Current Liabilities of the Business as of the applicable date applying the
same accounting policies and principles as were used in preparing the
Business Latest Balance Sheet and shall accrue expenses through the date
that Working Capital is calculated in such statements as if such date were
at the end of an accounting period, except that the Closing Date Working
Capital Statement shall rely on a physical inventory made by
representatives of Buyer and Sellers and a valuation thereof consistent
with the representations made in Section 4.19 hereof. Such statements
shall be accompanied by a certificate of the Chief Financial Officer of
Piccadilly to the foregoing effect.
2.11 PURCHASE PRICE ALLOCATION. Buyer and Seller agree that the
allocation of the Purchase Price among each of the Acquired Assets
transferred hereunder will be as determined by mutual agreement of the
parties; provided, however, that the amount of the Purchase Price to be
allocated to the Shares shall be no less than $3.5 million , all as to be
set forth on an allocation statement to be executed by Buyer and Sellers.
Buyer and Sellers will each file or cause to be filed all federal, state
and local tax returns in accordance with such allocation.
2.12 TRANSFER OF TITLE. Title and risk of loss with respect to the
Acquired Assets and the Shares and Buyer's right to operate and control the
Acquired Assets and the Business will pass from Seller to Buyer at the
Effective Time.
2.13 CONDITION OF ASSETS: INTENDED USE. (a) Prior to the Closing,
Buyer will have carefully inspected the Acquired Assets and will knowingly
and voluntarily accept such Acquired Assets "as is" and "where is." Except
for the representations and warranties given in Section 4 hereof, no
representation or warranty, express or implied, has been made by or on
behalf of Sellers with respect to the present condition of the Acquired
Assets or the present or future suitability thereof for any intended use by
Buyer. Sellers do not warrant that the Acquired Assets are free from
redhibitory latent defects or vices. Buyer hereby (i) expressly waives all
rights in redhibition and reduction of purchase price pursuant to Louisiana
Civil Code Articles 2520 et seq. and the warranty imposed by Louisiana
Civil Code Article 2476 and (ii) releases Sellers from any liability for
redhibitory or latent defects or vices under Louisiana Civil Code Articles
2520 (1870) through 2548 (1870); provided, however, that the foregoing
shall not be deemed to be a waiver of any claim for a breach of a
representation, warranty or covenant contained in this Agreement, or for
willful concealment or fraud.
(b) Sellers make no warranty, express or implied, regarding
the commercial suitability of the Acquired Assets for Buyer's intended use.
Buyer acknowledges that Buyer's knowledge of its intended commercial
activity is superior to that of Sellers and consequently Sellers cannot
offer, and have not offered, any warranty, express or implied, with regard
to Buyer's intended commercial use of the Acquired Assets.
SECTION 3. THE CLOSING
3.1 CLOSING. The closing of the transactions contemplated hereby
shall take place at the offices of Jones, Walker, Waechter, Poitevent,
Carrere & Xxxxxxx, L.L.P. in New Orleans, Louisiana commencing at 10:00
a.m. local time on any date specified by one party to the other upon five
days' notice following satisfaction of the latest to occur of the
conditions set forth in Section 7.1; provided that the other conditions set
forth in Section 7 shall have been satisfied or waived by the party
entitled to grant such waiver.
3.2 DELIVERIES AT CLOSING. If all conditions set forth in Section
7 are satisfied or waived by each party entitled to grant such waiver, at
the Closing: (a) Sellers shall deliver, or cause to be delivered to Buyer
the following:
(i) Such deeds, bills of sale, assignments, releases,
consents to assignments and other instruments of sale, conveyance,
assignment, assumption and transfer satisfactory in form and substance to
Buyer and Sellers as may reasonably be required in order to convey to Buyer
all of Sellers' right, title and interest in and to the Acquired Assets;
(ii) certificates evidencing the Shares, which shall
be properly endorsed for transfer or accompanied by duly executed stock
powers, in either case executed in blank or in favor of Buyer or its
nominee as the Buyer may have directed prior to the Closing Date;
(iii) to the extent transferrable, originals of all
permits, licenses and governmental, administrative and regulatory approvals
and authorizations that are in Seller's possession and that are necessary
to own and operate the Acquired Assets;
(iv) such other documents and instruments as shall be
reasonably necessary to effect the transactions contemplated hereby.
(b) Buyer shall deliver, or cause to be delivered to Sellers
the following:
(i) the Cash Payment, in cash by wire transfer to an
account or accounts specified by Sellers prior to the Closing;
(ii) an assumption agreement pursuant to which Buyer
shall assume the Assumed Liabilities and its allocated portion of the
Shared Liabilities; and
(iii) such other documents and instruments as shall be
reasonably necessary to effect the transactions contemplated hereby.
(c) Buyer and Sellers shall each provide to the other such
proof of satisfaction of the conditions set forth in Section 7 as the
parties whose obligations are conditioned upon such satisfaction may
reasonably request.
(d) Buyer and Sellers shall each provide to the other the
certificates and other agreements and documents required by Section 7 and
take such other action as is required to consummate the transactions
contemplated hereby.
SECTION 4. REPRESENTATIONS OF THE SELLERS
The Sellers represent and warrant to the Buyer as follows:
4.1 CORPORATE ORGANIZATION. (a) Each of the Sellers is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Louisiana and has the full corporate power and
authority to enter into this Agreement and to perform its obligations
hereunder.
(b) Bayou is a corporation duly organized, validly existing
and in good standing under the laws of the State of Louisiana. Bayou has
full corporate power and authority to own its properties and assets and to
carry on its business as it is now being conducted. Bayou is duly
qualified or licensed to do business as a foreign corporation in good
standing in the jurisdictions in which the ownership of its property or the
conduct of its business requires such qualification, except those
jurisdictions, if any, in which the failure to be so qualified would not
have a Material Adverse Effect.
4.2 CAPITAL STOCK. Bayou has an authorized capitalization
consisting of 10,000 shares without par value of Common Stock, of which the
Shares are the only issued and outstanding shares of Common Stock. All
such outstanding Shares have been duly authorized and validly issued and
are fully paid and nonassessable. No shares of Common Stock are held in
Bayou's treasury. There are no outstanding options, warrants, rights,
calls, commitments, conversion rights, rights of exchange, plans or
agreements of any character, whether absolute or contingent, providing for
the purchase, issuance or sale of any shares of the capital stock of Bayou
other than as contemplated by this Agreement.
4.3 OWNERSHIP OF SHARES. (a) Piccadilly is the lawful, beneficial
and record owner of the Shares, all of which are owned by Piccadilly free
and clear of any Liens, and upon Closing Buyer will acquire good and valid
title to the Shares free and clear of Liens.
(b) Bayou has no subsidiaries and does not own or have the
right or obligation to acquire, directly or indirectly, any capital stock
or other equity or proprietary interest in any Person.
4.4 AUTHORIZATION; ENFORCEABILITY. The Board of Directors of each
of the Sellers has duly approved and authorized the execution and delivery
of this Agreement and the consummation of the transactions contemplated
hereby, and no other corporate proceedings on the part of the Sellers are
necessary to approve and authorize the execution and delivery of this
Agreement by the Sellers and the consummation by the Sellers of the
transactions contemplated hereby. This Agreement constitutes a legal,
valid and binding obligation of each of the Sellers, enforceable against
each in accordance with its terms, except that the enforcement hereof may
be limited by (a) bankruptcy, insolvency, reorganization, moratorium or
other similar laws now or hereafter in effect relating to creditors' rights
generally and (b) general principles of equity (regardless of whether
enforceability is considered in a proceeding in equity or at law).
4.5 NO APPROVALS OR CONFLICTS. Neither the execution, delivery or
performance by the Sellers of this Agreement nor the consummation by them
of the transactions contemplated by this Agreement will (a) violate,
conflict with or result in the breach of any provision of the articles of
incorporation or by-laws of either of the Sellers or Bayou, (b) violate,
conflict with or result in a breach of any provision of, or constitute a
default under, or result in the termination or cancellation of, or
accelerate the performance required by, or result in the creation of any
Lien upon the Acquired Assets, or upon any of the properties of Bayou or
upon Piccadilly's interest in the Shares under, any note, bond, mortgage,
indenture, license, lease, contract, agreement or other instrument or
commitment or obligation to which either of the Sellers, Bayou or any of
their properties may be bound or affected, (c) violate any order, writ,
injunction, decree, judgment, ruling, law, rule or regulation of any court
or governmental authority, domestic or foreign, applicable to either of the
Sellers or Bayou or any of their respective properties, or (d) except for
any required filings under the HSR Act (as provided in Section 6.1(b)) or
those that have already been obtained, require any consent, approval or
authorization of, or notice to, or declaration, filing or registration
with, any governmental or regulatory authority in connection with the
execution, delivery and performance of this Agreement by the Sellers.
4.6 PROPERTIES.
(a) The following Schedules set forth the information
indicated as of the dates noted on such Schedules:
(i) Schedule 4.6(a)(i) is a description of the Immovable
Property;
(ii) Schedule 4.6(a)(ii) is a list of the Equipment;
(iii) Schedule 4.6(a)(iii) is a list of the Acquired
Assets that are not owned by Seller, but are leased to
Seller, such that the interest therein to be conveyed to
Purchaser is that of a leasehold interest, together with
an identification of each such lease;
(iv) Schedule 4.6(a)(iv) is a list of all leases to
which any of the Acquired Assets owned by Seller are
subject;
(b) With respect to the Immovable Property:
(i) Except as set forth on Schedule 4.6(b) hereof, a
Seller or Bayou has insurable title to the Immovable Property free and
clear of any Liens other than Permitted Liens.
(ii) There are no commitments made by Sellers or Bayou
to any governmental or quasi-governmental authority having jurisdiction, or
to any third party, to dedicate or grant any portion of the Immovable
Property for easements, rights-of-ways, or other public purposes, or to
subject the Immovable Property to any restrictions, or to incur any other
expense or obligation relating to the Immovable Property.
(c) A Seller or Bayou has good title to all of the Acquired
Assets (other than the Immovable Property, as to which the title warranty
is limited to that set forth in Section 4.6(b)(i) hereof) except for (i)
any Acquired Assets subject to a leasehold interest, as identified on
Schedule 4.6(a)(iv), and (ii) such inventory as has been disposed of in the
ordinary course of business.
(d) With respect to the Real Property Leases, Seller
represents as follows:
(i) Sellers have provided Buyer with complete and
correct copies of the Real Property Leases;
(ii) None of the Real Property Leases have been
modified, amended or assigned by Sellers, and each of them is legally
valid, binding and enforceable against Sellers and, to the actual knowledge
of Sellers, against each other Person that is a party thereto, in
accordance with its respective terms and is, to the knowledge of Sellers,
in full force and effect;
(iii) There are no monetary defaults by Sellers and no
material nonmonetary defaults by Sellers, or, to the actual knowledge of
Sellers, any other party to the Real Property leases;
(iv) Sellers have not received notice of any default,
offset, counterclaim or defense under any of the Real Property Leases;
(v) No condition or event has occurred which with the
passage of time or the giving of notice or both would constitute a default
or breach by either of Sellers of the terms of any of the Real Property
Leases. All of the rent, security deposits, reserve funds, and other sums
and charges due and payable under the Real Property Leases have been paid
in full through the date hereof; and
(vi) To the actual knowledge of Sellers there are no
purchase contracts, options or other agreements of any kind whereby any
Person as of the date hereof, has acquired or will have any basis to assert
any right, title or interest in, or right to the possession, use, enjoyment
or proceeds of, any part or all of the interests in the Immovable Property
subject to the Real Property Leases.
4.7 CONTRACTS. Set forth on Schedule 4.7 is a list of all
contracts and commitments of either of the Sellers or Bayou relating to the
operation of the Business or the Acquired Assets (including without
limitation, mortgages, indentures, loan agreements, long-term supply
contracts and open contracts), except (1) the leases listed in Schedules
4.6(a)(iii) and (iv), (2) any contracts entered into in the ordinary course
of business that involve an aggregate expenditure in any year of less than
$10,000, provided that all of such undisclosed contracts do not involve
expenditures in excess of $100,000 in the aggregate, (3) any purchase
orders or commitments entered into in the ordinary course of business, and
(4) any contracts relating to Excluded Assets. Except as set forth on
Schedule 4.7, all such contracts or agreements are valid and in full force
and effect and, to the Knowledge of Sellers, no party thereto is in default
in any material respect under the terms thereof.
4.8 INTELLECTUAL PROPERTY. Schedule 4.8 identifies currently
registered trademarks, trade names, copyrights, and service marks used now
or within the last five years by Sellers or Bayou in the operation of the
Business. Except as set forth on Schedule 4.8, (a) neither of the Sellers
nor Bayou is bound by or a party to any options, licenses or agreements of
any kind with respect to trademarks, trade names, service marks, copyrights
and pending applications therefor relating to the Business and (b) neither
of the Sellers nor Bayou has been informed of any claims or suits pending
or threatened against it claiming an infringement by it of any recipes,
copyrights, licenses, trademarks, service marks or trade names of others in
connection with the Business.
4.9 LITIGATION AND CLAIMS. Except as set forth in Schedule 4.9,
there is no action, suit, investigation or proceeding at law or in equity,
any arbitration or any administrative or other proceeding relating to the
Business or the Acquired Assets or to Sellers' ability or right to sell the
Acquired Assets, by or before any court, governmental instrumentality or
agency, pending or, to the Knowledge of Sellers, threatened or contemplated
in writing against or affecting Bayou or Sellers, or any of its properties
or rights, that is likely to have a Material Adverse Effect. Neither of
the Sellers nor Bayou is currently subject to any judgment, order or decree
entered in any lawsuit or proceeding.
4.10 EMPLOYMENT RELATIONS. There (a) is no unfair labor practice
complaint against Bayou or Sellers relating to the Business or the Acquired
Assets pending before the National Labor Relations Board, (b) is no labor
strike, slowdown or stoppage pending or, to the Knowledge of Sellers,
threatened against or involving the employees of the Business, (c) is no
labor union that claims to represent the employees of the Business, (d) is
no collective bargaining agreement currently being negotiated by Bayou or
Sellers with respect to the employees of the Business, (e) is pending no
labor or labor related grievance related to the Business that is likely to
be material and no arbitration proceeding arising out of or under any
collective bargaining agreement of Bayou or Sellers and no claim therefor
has been asserted, and (f) has not been any material labor difficulty
experienced by Bayou or Sellers relating to the Business or the Acquired
Assets during the past three years. There are no employment contracts or
agreements with any employees of the Business, except for those agreements
listed on Schedule 10.5(d).
4.11 EMPLOYEE BENEFIT PLANS. (a) Bayou has no Employee Plans or
Benefit Arrangements other than through its participation, and the
participation of its employees, in the Employee Plans and Benefit
Arrangements of Piccadilly described in Section 10.5. Buyer will not incur
any liability, or other obligation to, or with respect to, such Benefit
Arrangement or Employee Plan that covers or provides benefits to former or
active employees of the Business or their beneficiaries, including any
fine, tax or penalty imposed by any federal, state or local government or
governmental agency or government-owned corporation, now or at any time in
the future, except for any severance benefits payable to such employees in
accordance with Section 10.5(d) and the provisions of Schedule 10.5(d)
hereto. (b) None of the Acquired Assets is subject to any lien in favor
of or asserted by the Internal Revenue Service, the Pension Benefit
Guaranty Corporation, the Department of Labor or any other governmental
authority, agency, department or government-owned corporation. All group
health plans of Piccadilly that are subject to Sections 601, et seq. of
ERISA or analogous state law and that cover employees of the Business have
at all times fully complied with the requirements of such statutes,
including without limitation the notification and continuation of coverage
of requirements thereof.
4.12 INTERESTS IN SUPPLIERS AND COMPETITORS. None of Bayou or
either of the Sellers, nor any officer or director (or, to the Knowledge of
Sellers, any member of the immediate family of a director or officer)
thereof, possesses, directly or indirectly, any financial interest in, or
is a director, officer or employee of, any Person that is a supplier,
distributor, lessor, lessee or competitor of the Business. Ownership of
less than 5% of any class of securities of a company that has registered at
least one class of its securities under the Securities Exchange Act of 1934
shall not be deemed a financial interest for purposes of this section.
4.13 ENVIRONMENTAL MATTERS. (a) One of the Sellers or Bayou
possesses all necessary Permits and authorizations that are required under
Environmental Laws to operate the Business and the Acquired Assets. Except
as disclosed on Schedule 4.13 or in a Report referred to in Section
4.13(e), to the Knowledge of Sellers, the operations of the Business are in
compliance in all material respects with all Environmental Laws, or such
Permits or authorizations, including but not limited to all laws and
regulations imposing record-keeping, maintenance, testing, storage,
transportation, use, generation, collection, treatment, recovery, removal,
discharge, disposal, inspection, registration, notification and reporting
requirements with respect to Hazardous Materials.
(b) None of Bayou nor either of the Sellers is subject to
any third party claims, administrative or judicial proceedings, agreements
or orders relating to the Business or the Acquired Assets pursuant to, nor
has any of them received any written notice of any actual or alleged
violations of, or responsibilities under, any Environmental Law.
(c) Except as disclosed on Schedule 4.13 or in an
Environmental Report referred to in Section 4.13(e), to the Knowledge of
Sellers, there are no Hazardous Materials used, disposed of, discharged or
stored by Bayou or Sellers in connection with the Business, and any
Hazardous Materials disclosed on Schedule 4.13 as used, disposed of,
discharged or stored are and have been so used, disposed of, discharged or
stored in compliance with Environmental Laws. To the Knowledge of Sellers,
there has been no Release at or from any of the Immovable Property
violating Environmental Laws or requiring Remedial Action, or at any
disposal, storage or treatment facility which received Hazardous Materials
generated by the Business or the Acquired Assets which is reasonably likely
to result in Environmental Liabilities.
(d) There are no disposal sites for Hazardous Materials
located on the Immovable Property.
(e) There have been no environmental investigations,
studies, audits, tests, reviews or other analyses (collectively,
"Environmental Reports") conducted by, or which are in the possession or
control of, Bayou, or the Sellers in relation to any Immovable Property,
except for those Environmental Reports which have been made available to
the Buyer prior to the date hereof, which Environmental Reports are listed
on Schedule 4.13. Sellers shall have no liability under Section 8.1(a)(i)
with respect to any matter fairly disclosed in an Environmental Report.
Seller represents that it has provided Buyer with complete copies of any
Environmental Reports referenced herein.
(f) There are no underground storage tanks on the Immovable
Property.
4.14 COMPLIANCE WITH LAWS. (a) Each of the Sellers and Bayou is in
compliance in all material respects with, and is not in default or
violation in any material respect under, and has not conducted its
operations in violation in any material respect of, any law, rule,
regulation, decree or order applicable to the Business or the Acquired
Assets.
(b) Except as provided in Schedule 4.14, at no time during
the last five years has either of the Sellers or Bayou been notified in
writing that it was the subject of any federal, state or local criminal
investigation. Except as provided in Schedule 4.14, at no time in the last
five years has either of the Sellers or Bayou been notified in writing by
any federal, state or local governmental authority of any violation of any
law, regulation, ordinance, rule or order (including those described in
other subsections of this Section 4).
4.15 LICENSES AND PERMITS. One of the Sellers or Bayou possesses
such federal, state, and local licenses, permits and other authorizations
necessary for the continued conduct of the Business in the ordinary course,
consistent with past practices, without material interruption,
(collectively "Permits"), and such Permits are in full force and effect and
have been and are being fully complied with by it in all material respects.
None of the governmental agencies or instrumentalities that have issued the
Permits has notified Bayou or Sellers in writing of its intent to modify,
revoke, terminate or fail to renew any such Permit, and, to the Knowledge
of Sellers, no such action has been threatened. No Permit shall be
modified, revoked or shall lapse as a result of the Stock and Asset Sale,
except as provided for in Schedule 4.15.
4.16 FINANCIAL STATEMENTS. The Business Financial Statements have
been prepared in accordance with GAAP applied on a basis consistent with
prior periods and present fairly the financial condition and results of
operations of the Business as of the respective dates hereof and for the
periods referred to therein. The interim financial statements included
within the Business Financial Statements reflect all adjustments which are
necessary for a fair statement of the results for the interim periods
presented therein. Except as disclosed in Schedule 4.16, the Business does
not have, nor are any of its assets subject to, any liability, commitment,
indebtedness or obligation (of any kind whatsoever, whether absolute,
accrued, contingent, known, unknown, matured or unmatured) ("Undisclosed
Liabilities") except for Undisclosed Liabilities that (i) are disclosed or
required to be disclosed or are expressly exempted from disclosure by
another representation contained in this Section 4, (ii) are contained or
disclosed in the Business Financial Statements, (iii) arise under the
economic terms and general provisions of any contract or arrangement of
Business or (iv) could not be reasonably expected to have a Material
Adverse Effect.
4.17 ABSENCE OF CERTAIN CHANGES. Except as set forth in Schedule
4.17 or as expressly provided for elsewhere herein, neither Bayou nor
either of the Sellers has with respect to the Business or the Acquired
Assets, since the date of the Business Latest Balance Sheet: (a) incurred
any Indebtedness except Intercompany Indebtedness, (b) permitted any of the
Acquired Assets to be subjected to any Lien, other than a Permitted Lien,
(c) sold, transferred or otherwise disposed of any assets that would
constitute Acquired Assets, except for dispositions or consumptions of
assets or inventory in the ordinary course of business, (d) made any
material capital expenditure or commitment therefor except in the ordinary
course of business, (e) made any loan to any Person other than intercompany
loans that are included within Intercompany Indebtedness, (f) waived any
rights or settled any claims, except for such waivers or settlements
granted or entered into in the ordinary course of business, (g) granted any
increase in the rate of wages, salaries or other compensation or benefits
to any of its employees, other than increases or payments in the ordinary
course of its business consistent with past practice, (h) adopted, or
amended or modified in any respect, any Benefit Arrangement or Employee
Plan, (i) made any change in any method of accounting practice, (j)
suffered or incurred any damage, destruction, fire, explosion, accident,
flood, or other casualty loss or act of God (whether or not covered by
insurance) that has had a Material Adverse Effect, (k) amended or
terminated, or suffered any amendment or termination of, any Permit,
contract, lease, license, purchase order or similar commitment or right
that is likely to have a Material Adverse Effect, (l) suffered any labor
disputes or disturbances that is likely to have a Material Adverse Effect,
(m) otherwise failed to operate its business in the ordinary course
consistent with past practices so as to preserve its business organization
intact and to preserve the goodwill of its customers, suppliers, employees
and others with whom it has business relations, or (n) agreed to do any of
the foregoing.
4.18 TAXES. All foreign, federal, state, parish and local Tax
Returns required to be filed by or on behalf of members of the Sellers'
Group have been filed within the time period and in the manner prescribed
by law. Sellers have no reason to believe that any such Returns filed for
the five preceding calendar years do not reflect accurately all liability
for Taxes required to be paid in connection with the operations of the
Business for the periods covered thereby. All Taxes owed in connection
with the operations of the Business or the ownership, use or operation of
the Acquired Assets have been paid in full or appropriate provision for
payment has been made through the date hereof, including all estimated
corporate income Tax payments due and payable through the date hereof.
Sellers and Bayou currently have no outstanding Tax liability under the law
of any jurisdiction that would subject Buyer or the Acquired Assets to the
liability or withholding requirements of such jurisdiction's law. There is
no pending examination or proceeding by any authority or agency with
respect to the Sellers' Group relating to the assessment or collection of
any Taxes.
4.19 INVENTORY. All inventory of Sellers and Bayou related to the
Business consist of items normally usable or saleable in the ordinary
course of the Business. The values at which such inventories are reflected
on the Business Latest Balance Sheet have been, and the value of all
inventories acquired thereafter until the Closing Date will be, determined
in accordance with GAAP. The value of all items of inventory reflected on
the Closing Date Working Capital Statement which are below standard quality
or are obsolete, unmarketable or unusable will have been written down to
net realizable value. The inventories of the Sellers and Bayou related to
the Business are reasonable in amount and comply with all applicable
industry standards, and the amount and mix of the inventories are
consistent with the reasonable requirements of the Business in accordance
with past practices.
4.20 EMPLOYEES: WAGE INCREASES. Schedule 10.5(a) lists (i) all
employees of the Business as of December 31, 1998 (the "Business
Employees"), indicating the name of the employer of each Business Employee
and the names, current rates of compensation, date of hire, and Social
Security numbers of the Business Employees. To the extent not set forth on
Schedule 4.7, Schedule 10.5(d) also lists any employment agreements with
current Business Employees. The employee records to be transferred by
Sellers as part of the Business will be correct and complete in all
material respects and will reflect the liability of Sellers or Bayou, if
any, for accrued vacation and sick leave.
4.21 INSURANCE. Schedule 4.21 sets forth the following information
with respect to each insurance policy (including policies provided for
property, casualty, liability and workers compensation, and bond and surety
arrangements) issued to Piccadilly and naming Restaurants and Bayou as
additional insureds and which relate to Acquired Assets or the operation of
the Business: (a) the name, address and telephone number of the broker; (b)
the name of the insurer; (c) the policy number and the period of coverage;
(d) the scope and the amount of coverage. With respect to each such
insurance policy: (i) the policy is legal, valid, and binding and
enforceable and in full force and effect; (ii) Sellers and Bayou are not in
breach or default (including in respect to the payment of premiums or the
giving of notices), and no event has occurred which notice or lapse of time
would constitute such a breach or default or permit termination,
modification, or acceleration, under the policy; and (iii) no party to the
policy has given written notice that it has repudiated any provision
thereof. Sellers and Bayou have continuously had substantially the same
insurance coverage as that herein described for the last five (5) calendar
years, and all such current coverage has been written
on an occurrence basis.
4.22 AFFILIATED TRANSACTIONS. Except as set forth on Schedule 4.22
and except for any Intercompany Indebtedness that will be negated at the
Closing pursuant to Section 2.7 herein, neither of the Sellers, nor any
shareholder, officer, director, or employee of the Sellers, or any
corporation or other entity controlled by or under common control, with any
of the foregoing, and no relative of any of the foregoing has:
(a) borrowed money from or loaned money to the Business
which remains outstanding (excluding travel advances in the ordinary course
of business and consistent with past practice);
(b) any contractual or other claim (except for compensation
as disclosed in the schedules to this Agreement) express or implied for any
kind whatsoever against the Business;
(c) any interest in any of the Acquired Assets (whether
ownership, contractual or otherwise); or
(d) engaged in any other transaction with the Business
(other than employment relationships) not otherwise reflected on Schedule
4.7.
4.23 BUYER'S ABILITY TO OPERATE THE BUSINESS. Except as disclosed
on Schedule 4.23 and subject to the consents, if any, required with respect
to the Real Property Leases and the Contracts, upon the sale to Buyer of
the Acquired Assets and the assumption by Buyer of the Assumed Liabilities
hereunder, Buyer shall have received from Sellers all the property,
equipment, inventory, contracts, permits, intellectual property, leasehold
interests, books and records, hardware and software, and other assets and
rights necessary for Buyer to conduct the Business in substantially the
same manner as it is presently conducted by Sellers and Bayou.
4.24 BROKER'S OR FINDER'S FEES. No agent, broker, person or firm
acting on behalf of the Sellers or Bayou is, or will be, entitled to any
commission or broker's or finder's fees from any parties hereto, or any
Affiliate of the parties hereto, in connection with the Stock and Asset
Sale, other than fees to Southcoast Capital L.L.C., the payment of which
shall be Piccadilly's sole responsibility.
4.25 NO OTHER REPRESENTATIONS. Sellers shall not be deemed to have
made to Buyer any representation or warranty other than as expressly made
by Sellers in this Section 4. Without limiting the generality of the
foregoing, and notwithstanding any otherwise express representations and
warranties made by Sellers in this Section 4, Seller makes no
representation or warranty to Buyer with respect to:
(a) any projections, estimates or budgets heretofore
delivered to or made available to Buyer of future revenues, expenses or
expenditures or future results of operations of Bayou and the Business; or
(b) except as expressly covered by a representation and
warranty contained in this Section 4 hereof, any appraisals, opinions of
value or description of the business or operations of Bayou and the
Business or any other information or documents (financial or otherwise)
made available to Buyer or its counsel, accountants or advisers with
respect to Bayou and the Business.
SECTION 5. REPRESENTATIONS OF THE BUYER
The Buyer represents and warrants to the Seller that:
5.1 CORPORATE ORGANIZATION. The Buyer is a corporation duly
organized, validly existing and in good standing under the laws of the
State of Delaware and has the full corporate power and authority to enter
into this Agreement and to perform its obligations hereunder.
5.2 AUTHORIZATION; ENFORCEABILITY. The Board of Directors of the
Buyer has duly approved and authorized the execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby, and
no other corporate proceedings on the part of the Buyer are necessary to
approve and authorize the execution and delivery of this Agreement by the
Buyer and the consummation by the Buyer of the transactions contemplated
hereby. This Agreement constitutes a legal, valid and binding obligation
of the Buyer, enforceable against the Buyer in accordance with its terms,
except that the enforcement hereof may be limited by (a) bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally and (b) general
principles of equity (regardless of whether enforceability is considered in
a proceeding in equity or at law).
5.3 NO APPROVALS OR CONFLICTS. Neither the execution and delivery
by the Buyer of this Agreement nor the consummation by the Buyer of the
Stock and Asset Sale will (a) violate, conflict with or result in the
breach of any provision of the certificate of incorporation or by-laws of
the Buyer, (b) violate, conflict with or result in a breach of any
provision of, or constitute a default under, or result in the termination
or cancellation of, or accelerate the performance required by, or result in
the creation of any Lien upon any of the properties of the Buyer under, any
note, bond, mortgage, indenture, license, lease, contract, agreement or
other instrument or commitment or obligation to which the Buyer or any of
its properties may be bound or affected, (c) violate any order, writ,
injunction, decree, judgment, ruling, law, rule or regulation of any court
or governmental authority, domestic or foreign, applicable to the Buyer or
its properties, or (d) except for any required filings under the HSR Act
(as provided in Section 6.1(b)) or those that have already been obtained,
require any consent, approval or authorization of, or notice to, or
declaration, filing or registration with, any governmental or regulatory
authority in connection with the execution, delivery and performance of
this Agreement by the Buyer other than those that, in the case of clauses
(b), (c) and (d) above, are not likely to have a Material Adverse Effect.
5.4 PURCHASE OF SHARES FOR INVESTMENT. Buyer represents and
warrants that it will acquire the Shares for investment and not with a view
to, or for resale in connection with, the distribution or other disposition
thereof in violation of the Securities Act of 1933, as amended. Buyer
agrees that it will not, directly or indirectly, offer, transfer, sell,
pledge, hypothecate or otherwise dispose of any of the Shares (or solicit
offers to buy, purchase, or otherwise acquire or take a pledge of any of
the Shares), except in compliance with the Securities Act, the rules and
regulations promulgated thereunder and applicable state securities laws.
5.5 BROKER'S OR FINDER'S FEES. No agent, broker, person or firm
acting on behalf of the Buyer is, or will be, entitled to any commission or
broker's or finder's fees from the any parties hereto, or any Affiliate of
the parties hereto, in connection with the Stock and Asset Sale.
5.6 PROCEEDINGS. There is no action, suit or proceeding at law or
in equity, any arbitration or any administrative or other proceeding by or
before any governmental instrumentality or agency, pending or, to the
knowledge of the Buyer, threatened against or affecting the Buyer that
could have a material adverse effect on the ability of the Buyer to
consummate the Stock and Asset Sale.
5.7 INVESTIGATION. Buyer acknowledges that (a) it has had the
opportunity to visit with the Sellers and Bayou and meet with their
respective officers and other representatives to discuss the Business and
the Acquired Assets and the liabilities, financial condition, cash flow and
operations of the Business; and (b) it has made its own independent
examination, investigation, analysis and evaluation of each, including
Buyer's own estimate of the value of the Business.
5.8 FINANCING. The Buyer has available funds or has obtained firm
financing commitments ("Commitment Letters") from reputable lenders for
amounts sufficient to enable it to finance fully the Purchase Price and the
transactions contemplated hereby and has delivered true and complete copies
of such commitments to the Sellers.
SECTION 6. PRE-CLOSING COVENANTS
From the date hereof through the Closing Date, the parties covenant
and agree as follows:
6.1 COOPERATION AND BEST EFFORTS; HSR FILING. (a) Each party will
cooperate with the other and use its best efforts to (i) procure all
necessary and appropriate consents and approvals, (ii) complete and file
all necessary and appropriate applications, notifications, filings and
certifications, (iii) satisfy all requirements prescribed by law for, and
all conditions set forth in this Agreement to, the consummation of the
Stock and Asset Sale, and (iv) effect the Stock and Asset Sale at the
earliest practicable date.
(b) Without limiting the generality of the foregoing, within
ten business days after the execution of this Agreement, Buyer and Sellers
shall each file or cause to be filed any notification and report forms and
related materials that it or its Affiliates may be required to file with
the Federal Trade Commission and the Antitrust Division of the United
States Department of Justice required under the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended, and the rules and regulations
promulgated thereunder (the "HSR Act").
6.2 PRESS RELEASES. Buyer will cooperate with the Sellers in the
preparation of any press releases announcing the execution of this
Agreement or the consummation of the Stock and Asset Sale. Buyer, without
the prior consent of Sellers, will not issue any press release or other
written or oral statement for general circulation relating to the
transactions contemplated hereby. Sellers agree that they will consult
with Buyer prior to the issuance of any press release or other written or
oral statement for general circulation relating to the transactions
described hereby, except to the extent such consultation is not feasible
for the Sellers to discharge their legal obligations.
6.3 REVIEW OF THE BUSINESS. Prior to the Closing Date, the Sellers
will afford the Buyer and its representatives, during regular business
hours and upon reasonable notice, such access to the properties, personnel
and books and records of the Business as the Buyer may reasonably request
in connection with the Stock and Asset Sale including the financing
therefor, in accordance with the terms of the Confidentiality Agreement, in
particular Section 7 thereof. To the extent the obligations hereunder
would not require the interruption of existing services, the unreasonable
devotion of managerial resources or attention, or materially interfere with
customer relations, Sellers shall fully cooperate in locating and affording
access to all such properties, assets, books and records for the Buyer, and
shall make such properties and assets available for such inspection by
Buyer. An employee or representative of Sellers, shall be entitled to be
present at any or all inspections of the Business' properties, assets and
records by Buyer or Buyer's representatives.
6.4 CONDUCT OF BUSINESS PRIOR TO THE CLOSING DATE. The Sellers and
Bayou shall conduct the operations of the Business in the ordinary and
usual course of business, preserve intact the Business and maintain the
current relationships of the Business with suppliers, distributors,
customers and others having business relationships with it. Without the
prior written consent of the Buyer, the Sellers shall not commit or omit to
do any act, and shall cause Bayou not to commit or omit to do any act, that
(i) would cause a breach of any agreement, commitment or covenant of the
Sellers contained in this Agreement in any material respect, or (ii) would
cause the representations and warranties contained in Section 4 to become
untrue in any material respect.
6.5 NOTIFICATION OF CHANGES. (a) Each of the Sellers and the
Buyer shall promptly notify the other of any event that causes any
representation or warranty given by either of them, respectively, in
Sections 4 and 5 to become untrue.
(b) The Sellers shall have the right until the Closing to
supplement or amend any of the Schedules described in Section 4 with
respect to any matter arising or discovered after the date of this
Agreement which, if existing or known on the date of this Agreement, would
have been required to be set forth or described in such Schedules. For all
purposes of this Agreement, including for purposes of determining whether
the conditions set forth in Section 7 have been fulfilled, the Schedules
shall be deemed to include only that information contained therein on the
date of this Agreement and shall be deemed to exclude all information
contained in any supplement or amendment thereto, except to the extent that
they reflect an event or condition that would be beneficial to the Buyer;
provided, however, that if the Closing shall occur, then all matters
disclosed pursuant to any such supplement or amendment shall be deemed
included in the Schedules at Closing (without necessity of a written waiver
or other action on the part of any party) and to modify the applicable
representations and warranties for all purposes.
6.6 CONFIDENTIALITY AGREEMENT. Notwithstanding anything to the
contrary therein, the Confidentiality Agreement shall remain in full force
and effect until the earlier of (i) the Closing Date or (ii) two years
after the termination of this Agreement under Section 11.
6.7 MATTERS AFFECTING THE IMMOVABLE PROPERTY.
(a) Promptly after execution of this Agreement, Buyer shall
obtain, at Buyer's expense, ALTA title policy commitments, ALTA surveys,
and Phase I environmental audits for the Immovable Property (the ALTA title
commitments, ALTA surveys, and Phase I environmental audits for the
Immovable Property being referred to herein collectively as the "Immovable
Property Audit Documents"). The title policy commitments shall be
accompanied by copies of the exceptions noted therein. Buyer shall have
thirty (30) days from date hereof to obtain the Immovable Property Audit
Documents. Buyer shall have fifteen (15) days after receipt of all of the
Immovable Property Audit Documents to conduct or cause to be conducted,
such review of the status of the Immovable Property as Buyer shall
determine (this forty-five (45) day period being referred to herein as the
"Immovable Property Audit Period"). If any such review by Buyer shall
reveal an Immovable Property Matter (as hereinafter defined) with respect
to the Immovable Property, Buyer shall deliver to Sellers a written notice
describing the Immovable Property Matter (the "Immovable Property Notice")
by the end of the Immovable Property Audit Period. Any Immovable Property
Matter which has been disclosed in the Immovable Property Audit Documents
and is not included in an Immovable Property Notice delivered by the Buyer
to Sellers shall be deemed to be accepted by Buyer and shall not give rise
to a right to terminate the Agreement as provided in Section 6.7(b).
Notwithstanding the above, any Immovable Property Matter that has been
disclosed in a Schedule to this Agreement (other than the title policies
attached as Exhibit 4.6(a)(i) to Schedule 4.6(a)(i)) or in the Business
Financial Statements, shall not form the basis of an Immovable Property
Notice.
(b) If Buyer shall deliver to Sellers an Immovable Property
Notice, Sellers may, in their discretion, elect to cure or remedy the
Immovable Property Matter disclosed therein. If Sellers shall fail to cure
or remedy any Immovable Property Matter within 30 days of receipt of such
Immovable Property Notice (the "Cure Period"), then Buyer may, in its
discretion, elect to terminate this Agreement by serving written notice
thereof on Sellers in person or by registered or certified mail on or after
the expiration of the Cure Period but no later than 10 days after the
expiration of said period.
(c) For purposes of this Agreement, "Immovable Property
Matter" shall mean: (i) any Lien other than a Permitted Lien with respect
to the Immovable Property; or (ii) a condemnation, expropriation or public
taking of all or any portion of any of the Immovable Property which,
individually or in the aggregate, has a material adverse effect on the
respective parcel of Immovable Property, or (iii) the presence of any
Hazardous Materials on any of the Immovable Property or the existence of
any environmental damages related to any of the Immovable Property that is
not disclosed in Schedule 4.13 or in a Report referred to in Section
4.13(e) hereof.
6.8 INSURANCE. Sellers and Bayou will continue to maintain
casualty insurance on the Acquired Assets with reputable insurance
companies having substantially the same coverages as the insurance policies
set forth on Schedule 4.21 to this Agreement. All such insurance policies
shall include a provision that they shall not be canceled on less than
thirty (30) days prior written notice to all insureds.
6.9 THIRD PARTY CONSENTS. Each of Sellers shall use its reasonable
best efforts to secure the written approval of all parties necessary for
the assignment of its interest in the Real Property Leases and the
Contracts to Buyer. Said consent shall include a statement that no default
currently exists under the respective Real Property Lease or Contract, as
the case may be, that no monetary or non-monetary default currently exists
under the respective Real Property Lease or Contract, as the case may be;
and in the case of the Real Property Leases, an agreement on the part of
the landlord and its lender, if any, that they will not disturb the
possession of Buyer under the Real Property Lease on the condition that
Buyer remains in compliance with the terms of the Real Property Lease,
agrees
to subordinate the Real Property Lease to the interest of the lender, and
attorn to the landlord and its lender.
6.10 AMENDMENT TO PENSION PLAN. Piccadilly agrees to amend the
Piccadilly Cafeterias, Inc. Pension Plan ("Pension Plan") prior to the
Closing Date to eliminate any language that could be interpreted as
requiring a partial termination of the Pension Plan as a result of the
transactions contemplated by this Agreement. Specifically, such amendment
will provide that the withdrawal from the Pension Plan by Bayou will not
result in a termination of the plan with respect to employees of Bayou and,
further, that, following such withdrawal, all assets of the Plan will
continue to be available to pay the benefits attributable to the employees
of Bayou.
6.11 IMMOVABLE PROPERTY. Prior to the Closing Date, each of Sellers
shall use its reasonable best efforts to remove from the public records the
inscriptions listed on Schedule 6.11 pertaining to the Immovable Property
or Buyer shall have received indemnity insurance against such inscriptions
from a title insurer. To the extent that any of the inscriptions on
Schedule 6.11 have not been removed or insured over by a title insurer as
of the Closing Date, from and after the Closing Date, Piccadilly shall
indemnify and hold harmless Buyer from and against any costs incurred by
Buyer in removing or satisfying any such inscriptions.
SECTION 7. CONDITIONS TO CLOSING
7.1 CONDITIONS APPLICABLE TO ALL PARTIES. The obligations of each
of the parties hereto to consummate the Stock and Asset Sale are subject to
the satisfaction (or the waiver by the Buyer and the Sellers) of the
following conditions at or prior to the Closing:
(a) Restraining Action. No judgment, order or decree shall
have been issued or rendered by any court or other governmental body to
restrain or prohibit the Stock and Asset Sale.
(b) Statutory Requirements and Regulatory Approval. All
statutory requirements for the valid consummation of the Stock and Asset
Sale shall have been fulfilled and all appropriate orders, consents and
approvals from all regulatory agencies and other governmental authorities
whose order, consent or approval is required by law for the consummation of
the Stock and Asset Sale shall have been received.
(c) HSR Act Proceedings. Any applicable waiting period
under the HSR Act shall have expired or been earlier terminated.
(d) Transition Services Agreement. The parties shall have
entered into a Transition Services Agreement in substantially the form
attached as Exhibit B.
7.2 ADDITIONAL CONDITIONS APPLICABLE TO THE BUYER'S OBLIGATIONS.
The obligations of the Buyer to consummate the Stock and Asset Sale are
also subject to the satisfaction (or waiver by the Buyer) of the following
conditions at or prior to the Closing:
(a) Representations, Warranties and Covenants. The
representations and warranties of the Sellers contained in Section 4 that
are qualified as to materiality shall be true and correct and such
representations and warranties that are not so qualified shall be true and
correct in all material respects on the Closing Date and the Sellers shall
have performed in all material respects all covenants required by this
Agreement to be performed by them at or prior to the Closing. The Sellers
shall have delivered to the Buyer on the Closing Date a certificate, dated
the Closing Date and duly executed by the Sellers, certifying to the
fulfillment of the conditions set forth in this paragraph.
(b) Immovable Property Audit. Buyer shall have received the
title insurance policy issued pursuant to the ALTA title policy commitment
included in the Immovable Property Audit Documents (or a marked up
commitment that will become the basis for the title insurance policy) as
required in Section 6.7 hereof. In addition, the Immovable Property Audit
Period specified in Section 6.7 shall have expired and either (i) Buyer
shall not have served an Immovable Property Notice on Sellers, or (ii) any
Immovable Property Matter disclosed in an Immovable Property Notice shall
have been cured to Buyer's satisfaction.
(c) Consents and Approvals. The consent of all parties
necessary for the assignment of Sellers' interest in the Real Property
Leases and the Sewer Service Agreement by and between the Water Works and
Sewer Board of the City of Birmingham and Piccadilly Restaurants, Inc.
dated August 23, 1994 shall have been obtained. Further, Restaurants shall
have executed and recorded a notice of amendment to the lease between
Bossier Crossroads, Inc. and Restaurants.
7.3 ADDITIONAL CONDITIONS APPLICABLE TO THE SELLERS' OBLIGATIONS.
The Sellers' obligations to consummate the Stock and Asset Sale are also
subject to the satisfaction (or the waiver by the Seller) of the following
conditions at or prior to the Closing:
(i) Representations, Warranties and Covenants. The
representations and warranties of the Buyer contained in Section 5 that are
qualified as to materiality shall be true and correct and such
representations and warranties that are not so qualified shall be true and
correct in all material respects on the Closing Date and the Buyer shall
have performed in all material respects all covenants required by this
Agreement to be performed by it at or prior to the Closing. The Buyer
shall have delivered to the Sellers on the Closing Date a certificate,
dated the Closing Date and duly executed by the Buyer, certifying to the
fulfillment of the conditions set forth in this paragraph.
SECTION 8. INDEMNIFICATION; SURVIVAL OF REPRESENTATIONS
8.1 INDEMNIFICATION. (a) After the Closing Date, subject to the
terms and conditions of this Section 8, including the limits on indemnity
set forth in Section 8.4, and further subject to the provisions of Section
9 regarding taxes, which indemnification obligation shall be independent of
this Section, Piccadilly shall indemnify and hold harmless the Buyer and
its Affiliates, and their respective officers, directors, employees, agents
and representatives (the "Buyer Indemnitees") from, and will pay to the
Buyer Indemnitees the amount (net of any proceeds received by the Buyer
Indemnitee from insurance or any quantifiable tax benefits in the year
incurred (but giving effect to any tax detriment from receipt of
indemnification proceeds), obtained) of, any loss, liability, judgment,
damage, cost or expense (including interest, penalties, and the reasonable
fees, disbursements and expenses of attorneys, accountants and other
professional advisors) (collectively, "Losses") arising from or in
connection with (i) any breach of any representation or warranty of the
Sellers contained in Section 4, (ii) a breach of any agreement or covenant
contained herein that by its terms is to be performed by the Sellers after
the Closing Date, (iii) Sellers' allocated portion of the Shared
Liabilities or (iv) any Excluded Liabilities.
(b) After the Closing Date, subject to the terms and
conditions of this Section 8, including the limits on indemnity set forth
in Section 8.4, the Buyer shall indemnify and hold harmless the Sellers and
their Affiliates and their respective officers, directors and
representatives (the "Seller Indemnitees") from, and will pay to the
Seller Indemnitees the amount (net of any proceeds received by the Seller
Indemnitee from insurance any quantifiable tax benefits in the year
incurred (but giving effect to any tax detriment from receipt of
indemnification proceeds) obtained) of, any Losses arising from or in
connection with (i) any breach of any representation or warranty of the
Buyer contained in Section 5, (ii) a breach of any agreement or covenant
contained herein that by its terms is to be performed by the Buyer after
the Closing Date, (iii) any Assumed Liabilities or Buyer's allocated
portion of the Shared Liabilities, or (iv) the operations or conduct of the
Business or the ownership or use of the Acquired Assets after the Closing
Date.
8.2 NOTICE AND DEFENSE OF CLAIMS. (a) A Person seeking
indemnification under this Section 8 (the "Indemnified Person") shall give
prompt written notice to the indemnifying person or persons, or successors
thereto (the "Indemnifying Person"), of any matter with respect to which
the Indemnified Person seeks to be indemnified (the "Indemnity Claim").
Such notice shall state the nature of the Indemnity Claim and, if known,
the amount of the Loss. If the Indemnity Claim arises from a claim of a
third party, the Indemnified Person shall give such notice within a
reasonable time after the Indemnified Person has actual notice of such
claim, and in the event that a suit or other proceeding is commenced,
within 20 days after receipt of written notice by the Indemnified Person
thereof. Notwithstanding anything in this paragraph to the contrary, the
failure of an Indemnified Person to give timely notice of an Indemnity
Claim shall not bar such Indemnity Claim except and to the extent that the
failure to give timely notice has impaired materially the ability of the
Indemnifying Person to defend the Indemnity Claim.
(b) If the Indemnity Claim arises from the claim or demand
of a third party, the Indemnifying Person shall assume its defense,
including the hiring of counsel and the payment of all fees and expenses.
The Indemnified Person shall have the right to employ separate counsel and
to participate in the defense thereof, but the fees and expenses of such
counsel shall be at the expense of the Indemnified Person unless both the
Indemnified Person and the Indemnifying Person are named as parties and the
Indemnified Person shall in good faith determine that representation by the
same counsel is inappropriate. In the event that the Indemnifying Person,
within 30 days after notice of any such action or claim, fails to assume
the defense thereof, the Indemnified Person shall have the right to
undertake the defense, compromise or settlement of such action, claim or
proceeding for the account of the Indemnifying Person, subject to the right
of the Indemnifying Person to assume the defense of such action, claim or
proceeding at any time prior to the settlement, compromise or final
determination thereof. Anything in this Section 8 to the contrary
notwithstanding, the Indemnifying Person shall not, without the Indemnified
Person's prior consent, settle or compromise any action or claim or consent
to the entry of any judgment with respect to any action, claim or
proceeding for anything other than money damages paid by the Indemnifying
Person. The Indemnifying Person may, without the Indemnified Person's
prior consent, settle or compromise any such action, claim or proceeding or
consent to entry of any judgment with respect to any such action or claim
that requires solely the payment of money damages by the Indemnifying
Person and that includes as an unconditional term thereof the release by
the claimant or the plaintiff of the Indemnified Person from all liability
in respect of such action, claim or proceeding.
(c) If the Indemnity Claim does not arise from the claim or
demand of a third party, the Indemnifying Person shall have 30 days after
receipt of written notice of such Indemnity Claim to object to such claim
by giving written notice to the Indemnified Person specifying the reasons
for such objection or objections. If the Indemnifying Person has not so
objected to the Indemnity Claim as of the close of business on such
thirtieth day, the total amount of the Indemnity Claim shall thereupon
become chargeable to and payable by the Indemnifying Person in accordance
with the terms and conditions of this section. If the Indemnifying Person
objects to the Indemnity Claim, the parties shall attempt to resolve the
challenge through negotiation in good faith. If the parties are unable to
settle any such dispute within ten Business Days after notice of the
Indemnifying Person's objection is received by the Indemnified Person,
either party may submit such matter to a single arbitrator. The arbitrator
will be selected by the joint agreement of the parties, but if they do not
agree within 20 calendar days of the lapse of the ten-Business Day period
referred to above, the selection shall be made in accordance with the
Commercial Arbitration Rules of the American Arbitration Association (the
"Rules"). If no such arbitrator is appointed within 45 calendar days of
any such request to such association, either party may apply to a court
having jurisdiction to make such appointment. The arbitrator shall conduct
the arbitration in the Parish of East Baton Rouge, State of Louisiana, in
accordance with the Rules and shall make a final determination, to be
provided in writing to each party, that resolves the dispute. The
prevailing party shall be entitled to recover from the other party the fees
of the arbitrator and the administrative costs of the arbitration. The
arbitrator shall apply the statutory and decisional law of the State of
Louisiana in substantially the same manner as do the courts of the State of
Louisiana in the case of contracts made and wholly performed within that
jurisdiction. All results of the arbitration proceeding shall be final,
conclusive and binding on all parties to this Agreement, and judgment upon
the arbitrator's award may be entered in any court of the State of
Louisiana having competent jurisdiction, unless such results or award are
clearly erroneous on the record before the arbitrator.
8.3 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The right to
indemnification under Section 8.1 for any breach of the representations and
warranties made by each party herein shall survive until the first
anniversary of the Closing Date, except that the representations set forth
in Section 4.18 shall survive until the fifth anniversary of the Closing
Date, and the representations set forth in Sections 4.2 and 4.3 shall
survive indefinitely.
8.4 LIMITATIONS. Notwithstanding anything to the contrary in this
Agreement:
(a) Subject to paragraph (e), neither the Sellers, on the
one hand, nor the Buyer, on the other hand, shall have any obligation to
make indemnification payments with respect to Indemnity Claims arising
under Sections 8.1(a)(i) or 8.1(b)(i), respectively, until the aggregate of
all claims against it hereunder exceeds one percent of the Purchase Price
and then only to the extent of any excess.
(b) Subject to paragraph (e), neither the Sellers, on the
one hand, nor the Buyer, on the other hand, shall have any liability with
respect to Indemnity Claims arising under Sections 8.1(a)(i) or 8.1(b)(i)
in excess of ten percent of the Purchase Price in the aggregate for all
such Indemnity Claims.
(c) In no event shall any recovery under this Agreement
include the loss of anticipated profits, loss of managerial time, or lost
opportunity.
(d) In the absence of fraud, this Section 8 shall serve as
the sole and exclusive remedy of the Buyer Indemnitees and the Seller
Indemnitees for Losses and for any other claims (other than those arising
under Section 6.11, 9 or 10.5) in any way relating to this Agreement to the
exclusion of all other statutory or common law remedies (including rights
under the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended), whether based on contract, tort, strict liability
or otherwise.
(e) The limitations of paragraph (a) and (b) do not apply
with respect to any claim which arises under clause 8.1(a)(iii) or (iv) or
8.1(b)(iii) or (iv), irrespective of whether any such claim could also
arise under clause 8.1(a)(i) or 8.1(b)(i), respectively.
8.5 ADJUSTMENT TO PURCHASE PRICE. If Sellers make any payment
pursuant to this Section 8, then such amount shall be treated as an
adjustment to the Purchase Price.
SECTION 9. TAX MATTERS
9.1 PREPARATION OF RETURNS AND PAYMENT OF TAXES. Piccadilly and
Bayou shall prepare and timely file (taking into account the extension of
any due date) all Returns and amendments thereto required to be filed by
them and the Sellers' Group on or before the Closing Date. Piccadilly,
Bayou, and each member of the Sellers' Group shall pay and discharge all
such Taxes upon or against it or any of its properties or assets (including
the Acquired Assets) before such Taxes shall become delinquent and before
penalties accrue thereon, except to the extent and as long as: (a) such
Taxes are being contested in good faith and by appropriate proceedings
pursued diligently and in such a manner as not to cause any material
adverse effect upon the Business; and (b) Bayou shall have set aside on its
books reserves (segregated to the extent required by sound accounting
practice) in the amount of the demanded principal imposition (together with
interest and penalties relating thereto, if any).
9.2 TAXES AND RETURNS FOR PERIODS THROUGH THE CLOSING DATE.
Piccadilly will include, or cause to be included, the income of Bayou and
the Business on the Sellers' Group's consolidated federal and any
consolidated, unitary or combined state and local income Tax Returns for
all periods through the Closing Date. Piccadilly will file timely or cause
to be filed timely such Returns and Piccadilly will pay or cause to be paid
any taxes attributable to such income, provided however that to the extent
that a liability for such taxes has been accrued on the Closing Date
Working Capital Statement, then Piccadilly shall have no obligation to make
such tax payment. Except as provided in Section 9.4, Piccadilly also will
timely prepare and file, or cause to be prepared and filed, all other
income Tax Returns of Bayou for all periods that end on or before the
Closing Date and will pay or cause to be paid all Taxes related thereto,
provided however that to the extent that a liability for such taxes has
been accrued and included in Closing Date Working Capital Statement, then
Piccadilly shall have no obligation to make such tax payment. Bayou will
furnish Tax information in its possession and reasonably requested by
Piccadilly for inclusion in such Tax Returns for the Sellers' Group for the
period ending on the Closing Date. The income of Bayou will be apportioned
to the period up to and including the Closing Date and to the period after
the Closing Date by closing the books of Bayou as of the end of the Closing
Date. The Buyer and Piccadilly agree that, if Bayou is permitted under any
applicable state or local income tax law to treat the Closing Date as the
last day of a taxable period, the Buyer, Piccadilly and Bayou shall treat
the Closing Date as the last day of such taxable period.
9.3 TAXES AND RETURNS FOR TRANSACTIONS THAT OCCUR AFTER THE
CLOSING DATE. The Buyer shall be responsible for all Taxes of Bayou and
the Business for taxable periods beginning after the Closing Date. The
Buyer shall be responsible for any Taxes that result from, any action or
election made by the Buyer or Bayou at the direction of the Buyer on or
after the Closing Date. If such an action or an election results in an
increase in Piccadilly's liability for Taxes under this Agreement, the
Buyer shall pay to Piccadilly an amount equal to the increase in such
Taxes.
9.4 TAXES AND RETURNS FOR PERIODS COMMENCING BEFORE THE CLOSING
DATE AND ENDING AFTER THE CLOSING DATE. The Buyer shall prepare or cause
to be prepared and file or cause to be filed any Tax Return of Bayou for
taxable periods that begin before the Closing Date and end after the
Closing Date. At least fifteen (15) business days before the filing of any
such Tax Returns with respect to income Taxes, the Buyer shall submit
copies of such Returns to Piccadilly for Piccadilly's approval, which
approval shall not be unreasonably withheld. Piccadilly shall pay to the
Buyer within fifteen (15) days after the date on which Taxes are paid by
the Buyer with respect to such periods an amount equal to the excess of (i)
the portion of such Taxes which relates to the portion of such taxable
period ending on the Closing Date (the "Pre-Closing Period") over (ii) the
amount of any Taxes (including estimated Tax payments) paid by Piccadilly
or Bayou prior to the Closing Date with respect to such taxable periods,
provided however that to the extent that a liability for such Taxes has
been accrued and included in Closing Date Working Capital Statement, then
Piccadilly shall have no obligation to make such Tax payment and provided
Piccadilly shall have no liability for any elections under Section 338 of
the Code or comparable provision of state law. In the event that the
amount described in (ii) of the immediately preceding sentence exceeds the
amount described in (i) of same sentence, the Buyer shall pay the excess to
Piccadilly within fifteen (15) days after the date on which such Taxes are
paid by the Buyer with respect to such periods. For purposes of this
Section, in the case of any Taxes that are imposed on a periodic basis and
are payable for a taxable period that includes (but does not end on) the
Closing Date, the portion of such Taxes which relates to the Pre-Closing
Period shall (i) in the case of any personal property and real property
Taxes, be deemed to be the amount of such Tax for the entire taxable period
multiplied by a fraction, the numerator of which is the number of days in
the Pre-Closing Period and the denominator of which is the number of days
in the entire taxable period, and (ii) in the case of all other Taxes, be
determined based on the actual operations of Bayou through the Closing
Date.
9.5 AUDITS. Piccadilly will allow, or cause to be allowed, Bayou
or its representatives to participate at Buyer's own expense in any audits
of the consolidated federal and consolidated, unitary or combined, income
tax Returns of Piccadilly and the Sellers' Group to the extent that such
audits relate to Bayou or the Business or Acquired Assets.
9.6 INDEMNIFICATION FOR TAXES. (a) From and after the Closing
Date, Piccadilly shall protect, defend, indemnify and hold harmless the
Buyer and Bayou from any and all Taxes (including any obligation to
contribute to the payment of any Taxes determined on a consolidated,
combined or unitary basis with respect to a Sellers' Group of corporations
that includes or included Bayou) which are (i) imposed on Piccadilly or any
member (other than Bayou) of the consolidated, unitary or combined Sellers'
Group which includes or included Bayou or (ii) imposed on Bayou in respect
of its income, business, property or operations or for which Bayou may
otherwise be liable (A) for any taxable period ending on or before the
Closing Date (except for those periods described in Section 9.3) and for
any Pre-Closing Period (as defined and determined in Section 9.4), provided
however that to the extent that a liability for such Taxes has been accrued
and included in the Closing Date Working Capital Statement, then Piccadilly
shall have no obligation to make such Tax payment, (B) resulting by reason
of the several liability of Bayou pursuant to Treasury Regulations section
1.1502-6 or any analogous state, local or foreign law or regulation or by
reason of Bayou having been a member of any consolidated, combined or
unitary Sellers' Group on or prior to the Closing Date, or (C) resulting
from Bayou ceasing to be a member of the affiliated Sellers' Group (within
the meaning Section 1504(a) of the Code) that includes Piccadilly. Any
indemnification of Buyer for any Taxes hereunder shall be reduced by any
tax benefit resulting to Buyer or Bayou from the adjustment resulting in
the indemnification. Furthermore, if Piccadilly is required to pay
additional Taxes for a Pre-Closing Period, and such payment provides a tax
benefit to Buyer or Bayou for a Post-Closing Period, than Buyer shall
indemnify Piccadilly to the extent of such tax benefit.
(b) In the case of any audit, examination or other
proceeding ("Proceeding") with respect to Taxes for which Piccadilly is or
may be liable pursuant to this Agreement, the Buyer shall promptly inform
Piccadilly, and shall afford Piccadilly, at Piccadilly's expense, the
opportunity to control the conduct of such Proceedings. The Buyer shall
execute or cause to be executed powers of attorney or other documents
necessary to enable Piccadilly to take all actions desired by Piccadilly
with respect to such Proceeding to the extent such Proceeding may affect
the amount of Taxes for which Piccadilly is liable pursuant to this
Agreement. Piccadilly shall have the right to control any such
Proceedings, and, if there is substantial authority therefor, to initiate
any claim for refund, file any amended Return or take any other action
which it deems appropriate with respect to such Taxes. Notwithstanding the
foregoing, Piccadilly shall not agree to any settlement concerning Taxes
for any taxable period ending on or before the Closing Date which may
result in a material increase in Taxes for any taxable period ending after
the Closing Date without the prior written consent of the Buyer. By
written notice to Piccadilly, the Buyer shall have the right to instruct
Piccadilly to forego Proceedings with respect to one or more items for
which Piccadilly may be liable to indemnify the Buyer. Such notice shall
constitute a waiver of the right of the Buyer to indemnification for any
Taxes arising out of such item for the period or periods involved, but
shall not otherwise waive any rights of the Buyer under this Section.
Buyer shall not agree to extend the statute of limitations for any taxable
period of Bayou before or which includes the Closing Date without the prior
consent of Piccadilly. Any indemnification of Buyer for any Taxes
hereunder shall be reduced by any tax benefit resulting to Buyer or Bayou
from the adjustment resulting in the indemnification.
(c) If the Buyer receives, or is entitled to receive, any
refund of Taxes (either by actual receipt or by application against future
Taxes of Bayou), then the Buyer shall pay to Piccadilly the portion of such
refund that (i) relates to the Pre-Closing Period of any taxable period
that begins before and ends after the Closing Date (as defined and
determined pursuant to Section 9.4) or (ii) relates to any taxable period
that ends prior to or on the Closing Date. Any payment described in this
Section 9.6(c) shall be made by the Buyer to Piccadilly within thirty (30)
days of the date on which the Buyer receives the refund of Taxes.
9.7 COOPERATION ON TAX MATTERS. The Buyer and Piccadilly and Bayou
shall cooperate fully, and to the extent reasonably requested by the other
party, in connection with the filing of Returns pursuant to this Section
and in connection with any audit, litigation or other Proceeding with
respect to Taxes. Such cooperation shall include the retention and (upon
the other party's request) the provision, of records and information which
are reasonably relevant to any such Return, audit, litigation or other
Proceeding and making employees available on a mutually convenient basis to
provide additional information and explanation of any material provided
hereunder. The Buyer and Piccadilly agree to retain all books and records
with respect to Tax matters pertinent to Bayou and the Business relating to
any taxable period beginning before the Closing Date until the expiration
of the applicable statute of limitation (and to the extent notified by the
Buyer or Piccadilly, any extensions thereof) of the respective taxable
periods and to abide by all record retention agreements entered into with
any taxing authority.
9.8 TRANSFER TAXES. Buyer shall pay and hold Sellers harmless from
and against any sales, use or transfer tax assessed with respect to the
assets of Bayou, the Shares or the Acquired Assets.
9.9 SURVIVAL. The indemnities set forth in this Section 9 shall
survive the Closing Date and shall terminate on the date that is 30 days
after the expiration of the applicable statute of limitations.
SECTION 10. OTHER POST-CLOSING COVENANTS
After the Closing Date, the parties covenant and agree as follows:
10.1 ASSIGNMENT OF CERTAIN CONTRACTS. Notwithstanding any other
provision of this Agreement to the contrary, except for the third-party
consents described in Section 7.2(c), to the extent that any agreement,
contract, license, lease, permit or other authorization, purchase or sale
order, or other executory contract or commitment for which assignment to
Buyer is contemplated hereby is not assignable without the consent of
another Person, this Agreement shall not be deemed to constitute or require
an assignment or an attempted assignment thereof if such assignment or
attempted assignment would constitute a breach thereof. If such consent
has not been obtained by the Closing Date, Sellers agree to (i) cooperate
with Buyer in any reasonable arrangement designed to provide for Buyer
substantially the same benefits and obligations under any such agreement,
contract, license, lease, permit or other authorization, purchase or sale
order, or other executory contract or commitment without cost to Buyer,
including (A) enforcing for the benefit of Buyer any or all rights of
Sellers under any contract, commitment, permit or other authorization, or
other agreement against any other Person that is a party thereto, or (B) at
Buyer's election, not transferring, conveying, assigning or delivering to
Buyer at the Closing, and retaining legal title or right thereto, while
permitting Buyer the possession and use of such assets or rights for
Buyer's account and with Buyer receiving the benefits and burdens of such
assets or rights as if such assets or rights had been so transferred,
conveyed, assigned and delivered, and (ii) take all reasonable further
action to obtain such consents, approvals or novations as may be required
under such instrument, applicable law or otherwise to effect the transfer
of the asset or right to Buyer.
10.2 FURTHER ASSURANCES. Sellers and Buyer each agree to execute
and deliver such other documents, certificates, agreements and other
writings and to take such other actions as may be necessary or desirable in
order to consummate or implement expeditiously the transactions
contemplated by this Agreement, including without limitation any and all
documents necessary to assign to Buyer any of the Acquired Assets used by
Sellers in the operation of the Business that are not conveyed to Buyer at
the Closing.
10.3 RECORD RETENTION. The Buyer agrees that, for a period of five
years following the Closing, it shall not, and shall cause Bayou not to,
destroy, discard, deface or otherwise alter any of the books, records or
other data of the Business in its possession covering or prepared during
the period ending on the Closing Date, without furnishing prior notice to
Piccadilly and a reasonable opportunity for Piccadilly, at its cost, to
take custody of such books, records or other data.
10.4 MAIL AND OTHER COMMUNICATIONS. (a) Sellers hereby authorizes
Buyer after the Closing Date to receive and open all mail and other
communications addressed to Sellers received by Buyer and to act with
respect to such mail and other communications in such manner as Buyer may
elect if such mail and other communications relate to the Business and
related rights and obligations of Buyer under this Agreement, or if such
mail and other communications do not so relate, to forward such mail and
other communications promptly to Sellers.
(b) After the Closing, Sellers shall promptly deliver to
Buyer the original of any mail or other communication received by it
pertaining to the Business and related rights and obligations of Buyer
under this Agreement, and any monies, checks or other instruments of
payment to which Buyer is entitled, and Buyer shall promptly deliver to
Sellers any monies, checks or instruments of payment to which Sellers is
entitled.
10.5 COVENANTS CONCERNING EMPLOYEE MATTERS.
(a) Set forth on Schedule 10.5(a) is a list of each
individual currently employed by the Sellers or Bayou exclusively in
relation to the Business (the "Business Employees"). Buyer hereby agrees
that (i) effective as of the Closing Date each Business Employee who is
employed by either of the Sellers shall be terminated as an employee of
such Seller and shall be offered employment by Buyer and (ii) it will not
publish or otherwise issue any notice of or take any action that would
constitute or effectuate a "plant closing" or "mass layoff" (within the
meaning of the Worker Adjustment and Retraining Notification Act) with
respect to the operation of the Business prior to the 61st day following
the Closing Date, unless such notice or other action with respect to a
"plant closing" or "mass layoff" is permitted to occur under such Act
without penalty or liability to either Buyer or Sellers. Except as set
forth in Section 10.5(a)(ii) or in Section 10.5(d) nothing herein shall be
construed as an ongoing commitment by Buyer to continue the employment of
any Business Employee.
(b) Participation in Piccadilly's Plans. (i) Effective as
of the Closing Date, Bayou shall cease to be a participating employer in
all of Piccadilly's Employee Plans or Benefit Arrangements, and Piccadilly
shall take all such action as is necessary to effect such cessation of
participation.
(ii) Buyer shall incur no liability under the Pension
Plan (as defined in section 6.10 herein). The accrued benefits of the
Business Employees under the Pension Plan shall be frozen as of the Closing
Date, and Piccadilly shall determine the time and manner of payment of
their benefits.
(iii) Effective as of the Closing Date, the Business
Employees shall cease to participate in Piccadilly's non-pension Benefit
Arrangements and Employee Plans (the "Welfare Benefit Plans"). Piccadilly
shall retain responsibility under the Welfare Benefit Plans for all costs
of coverage and all amounts payable by reason of claims incurred by the
Business Employees prior to the Closing Date including claims which are not
submitted until after the Closing Date. A claim shall be deemed to have
been incurred on the date of the occurrence of (A) death or dismemberment
in the case of claims under life insurance and accidental death and
dismemberment benefits, (B) the date of the initial disability in the case
of claims under disability benefits, or (C) the date on which the charge or
expense giving rise to such claim is incurred in the case of all other
claims. For purposes of Section 10.5(b)(iii)(C), a claim shall be deemed
to have been incurred on the date that the first charge or expense in a
course of treatment giving rise to such claim has been incurred.
(iv) Piccadilly shall remain responsible for all
record keeping and welfare benefits with respect to any employees or former
employees of the Business who are, as of the Closing Date: (A) on COBRA
continuation coverage or (B) on long term disability leave and covered
under Piccadilly's welfare benefit plans. Immediately following the
Closing Date, Piccadilly will notify all Business Employees of their
entitlement to a continuation of health coverage provided by Piccadilly to
such Business Employees under Piccadilly's group health plan prior to the
Closing Date.
(c) Post-Closing Benefits. Following consummation of the
Stock and Asset Sale, the Buyer shall cause the Business Employees to be
eligible to participate in an "employee welfare benefit plan" and "employee
pension benefit plan" (within the meaning of Section 3(1) and Section 3(2)
of ERISA, respectively) of the Buyer or subsidiary or affiliate of the
Buyer, or such other benefit plan, fund or program that the Buyer may wish
to establish for such employees on or after the Closing Date, provided that
nothing herein shall prevent the Buyer from terminating the employment of
any such employee or modifying or terminating such plans from time to time.
For purposes of any length of service requirements, waiting periods,
vesting periods or differential benefits based on length of service in any
such plan for which such an employee may be eligible after Closing, the
Buyer shall ensure that service by such employee with the Business prior to
the Closing shall be deemed to be service with the Buyer, shall waive any
waiting period for participation or coverage in any welfare benefit plans
or policies and, to the extent such employee was a participant in
Piccadilly's medical benefits plan and such condition was covered under
such plan, shall waive any pre-existing medical condition provision of such
plan or policy.
(d) Stay Agreements. Buyer shall honor and not revoke all
terms of the Employee Stay Incentive Agreements for employees of the
Business that were executed in September, 1998, as set forth on Schedule
10.5(d).
(e) Indemnification for Piccadilly Benefit Plans. In
addition to its obligations under Section 8, from and after the Closing
Date, Piccadilly shall indemnify and hold harmless Buyer and Bayou from any
and all liabilities that either Buyer or Bayou incurs or that arises with
respect to Piccadilly's Employee Plans or Benefit Arrangements.
SECTION 11. TERMINATION
11.1 TERMINATION. This Agreement may, by notice given at or prior
to the Closing, be terminated:
(a) By the mutual written consent of the Sellers and the
Buyer.
(b) By the Buyer or Sellers if there has been a material
breach by the other of any covenant contained in this Agreement that is not
or cannot be cured within 45 days after written notice of such breach is
given to the party committing such breach, provided that the right to
effect such cure shall not extend beyond the date set forth in subparagraph
(c) below.
(c) By the Buyer or Sellers if (i) any condition to Closing
required by Section 7 has not been met or waived by each party entitled to
grant such waiver by Xxxxx 00, 0000, (xx) any such condition cannot be met
by such date and has not been waived by each party in whose favor such
condition runs or (iii) the Stock and Asset Sale has not occurred by such
date; provided, however, that the right to terminate this Agreement
pursuant to this paragraph shall not be available to a party if its failure
to fulfill or perform any obligation under this Agreement has been a
substantial cause of, or has substantially resulted in, the failure of the
Closing to occur or be capable of occurring on or before such date.
(d) By the Buyer in accordance with Section 6.7 hereof.
11.2 EFFECT OF TERMINATION; SURVIVAL. Upon termination of this
Agreement pursuant to this Section 11, this Agreement shall be void and
there shall be no liability by reason of this Agreement, or the termination
thereof, on the part of any party or their respective directors, officers,
employees, agents or shareholders except for any liability of a party
hereto arising out of a material breach of its representations and
warranties contained herein or arising out of a material breach of any
covenant in this Agreement prior to the date of termination or any covenant
that survives pursuant to the following sentence. The following provisions
shall survive any termination of this Agreement: Sections 6.6 and 12.
SECTION 12. MISCELLANEOUS
12.1 NOTICES. Any notice, communication, request, reply, consent,
advice or disclosure notice ("notice") required or permitted to be given or
made by any party to the other in connection with this Agreement must be in
writing and may be given or served by depositing such notice in the United
States mail, postage prepaid and registered or certified with return
receipt requested, or by hand delivering such notice, or by sending such
notice by a national commercial courier service for next business day
delivery, in each case properly addressed as provided below. Notice
deposited in the mail in the manner described above shall be effective 72
hours after such deposit, notice hand delivered in person or delivered by
commercial courier shall be effective at the time of delivery and notice
given by facsimile shall be effective when such facsimile is transmitted to
the facsimile number specified in this Section 12.1 and confirmation of
transmission is received by the giver of such notice (provided that a
confirmation copy is sent no later than the next Business Day by documented
overnight delivery service). For purposes of notice, the addresses of the
parties shall, until changed as hereinafter provided, be as follows:
If to the Sellers:
Piccadilly Cafeterias, Inc.
0000 Xxxxxxxx Xxxxxx Xxxx.
Xxxxx Xxxxx, Xxxxxxxxx 00000
Attention: Xxxxxx X. XxXxxxx
FACSIMILE NO: 000-000-0000
With a copy to:
Jones, Walker, Waechter, Poitevent, Carrere & Xxxxxxx, L.L.P.
000 Xx. Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxx 00000-0000
Attention: Xxxxxx X. Xxxxx
FACSIMILE NO: 000-000-0000
If to the Buyer:
Xxxx Investment Company, Inc.
0000 Xxxxxxx Xxxx, 0xx Xxxxx
Xxxxxx, Xxxxxxx 00000
Attention: Xxxxx Xxxxx
FACSIMILE NO: 000-000-0000
With a copy to:
Xxxx Xxxxxx
0000 Xxxxx Xxxxx Tower
000 Xxxxx 00xx Xxxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxx Xxxxxxxxxx
FACSIMILE NO: 000-000-0000
Chaffe, McCall, Xxxxxxxx, Xxxxx & Sarpy LLP
2300 Energy Centre
0000 Xxxxxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxx 00000-0000
Attention: Xxxxxxxx X. Xxxxxx
FACSIMILE NO: 000-000-0000
or such substituted persons or addresses of which any of the parties may
give notice to the other in writing.
12.2 WAIVER. The failure by any party to enforce any of its rights
hereunder shall not be deemed to be a waiver of such rights, unless such
waiver is an express written waiver which has been signed by the waiving
party. Waiver of any one breach shall not be deemed to be a waiver of any
other breach of the same or any other provision hereof.
12.3 EXPENSES. Regardless of whether the transactions contemplated by
this Agreement are consummated, all expenses, including fees for legal,
accounting, investment banking, financial and other advisory services,
incurred in connection with this Agreement and the transactions
contemplated hereby shall be borne by the party hereto incurring them,
provided that the Buyer shall bear all stock transfer taxes, recording
charges and filing fees, if any, that may be imposed in connection with the
transfer of the Shares from Piccadilly to the Buyer.
12.4 INTERPRETATION. (a) The table of contents and section headings
contained herein are inserted for convenience only and shall not affect in
any way the meaning or interpretation of this Agreement. Each of the
parties has participated substantially in the negotiation and drafting of
this Agreement and each party hereby disclaims any defense or assertion in
any litigation or arbitration that any ambiguity herein should be construed
against the draftsman.
(b) References to "Sections" or "Schedules" shall be to Sections
of or Schedules to this Agreement unless otherwise specifically provided.
(c) Wherever the words "include", "includes", and "including"
are used herein, such words shall be deemed to be followed by the words
"without limitation."
12.5 INTEGRATED AGREEMENT. This Agreement (along with the Exhibits
and Schedules referenced herein), the Confidentiality Agreement and the
Transition Services Agreement constitute the entire understanding and
agreement among the parties hereto with respect to the subject matter
hereof, and there are no agreements, covenants or understandings, among the
parties other than those set forth herein or therein, all prior agreements
and understandings being superseded hereby. Except and as to the extent
set forth in Sections 4 and 5, any schedule hereto or any certificate
delivered pursuant to Section 7, neither party makes any representations or
warranties whatsoever, and
disclaims all liability and responsibility for any representation or
warranty made or communicated orally or in writing to the other party
(including any information, opinion or advice that may have been provided
to the other party by any officer, director or employee of such party, such
party's counsel or accountants, or any other agent, consultant or
representative of such party, none of which has been relied upon by the
other party). Without limiting the generality of the foregoing, this
Agreement shall not be governed by the warranties provided by Article 2 of
the Uniform Commercial Code or any similar laws adopted in any
jurisdiction.
12.6 CHOICE OF LAW. The validity of this Agreement, the construction
of its terms and the determination of the rights and duties of the parties
hereto in accordance therewith shall be governed by and construed in
accordance with the laws of the State of Louisiana applicable to contracts
made and to be performed wholly within such State.
12.7 PARTIES IN INTEREST. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors
and no party hereto may assign its rights or obligations hereunder without
the prior written consent of the other party, except that the Buyer may
assign its rights to a wholly-owned subsidiary hereunder as long as Buyer
is not relieved of its obligations hereunder. Nothing in this Agreement is
intended or shall be construed to confer upon or to give any person other
than the parties hereto any rights or remedies under or by reason of this
Agreement.
12.8 AMENDMENT. Unless otherwise provided herein, this Agreement may
be amended only by an agreement in writing signed by each party hereto.
12.9 COUNTERPARTS. This Agreement may be executed by the parties in
one or more counterparts, all of which shall be deemed an original, but all
of which taken together shall constitute one and the same instrument.
12.10 BULK SALES LAW. Buyer hereby waives compliance by Sellers with
the provisions of any bulk sales laws applicable to this transaction, if
any, and Sellers hereby agree to indemnify Buyer for any claims and demands
of whatever nature (other than the liabilities expressly assumed by Buyer
under this Agreement) asserted against Buyer by any creditor of Sellers for
noncompliance by Sellers or Buyer with any bulk sales laws or similar laws
which may be applicable to the sale or transfer of the Acquired Assets
hereunder.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement, all as of the day and year first above written.
Piccadilly Cafeterias, Inc.
By: /S/ XXXXXX X. XXXXXXX
Xxxxxx X. XxXxxxx
President and
Chief Executive Officer
Piccadilly Restaurants, Inc.
By: /S/ XXXXXX X. XXXXXXX
Xxxxxx X. XxXxxxx
President and
Chief Executive Officer
Xxxx Investment Company, Inc.
By: /S/ XXXXXX X. XXXXX
Name: Xxxxxx X. Xxxxx
Title: Assistant Vice President and
Chief Financial Officer
TRANSITION SERVICES AGREEMENT
THIS TRANSITION SERVICES AGREEMENT (this "Agreement"), dated and
effective as of March 30, 1999, is by and between Piccadilly
Cafeterias, Inc., a Louisiana corporation ("Piccadilly") and Xxxx
Investment Company, Inc., a Delaware corporation ("Buyer").
W I T N E S S E T H :
WHEREAS, pursuant to the terms of the Stock and Asset Purchase
Agreement dated as of January 15, 1999 by and among the parties hereto and
Piccadilly Restaurants, Inc., Buyer purchased on the date hereof (the
"Closing Date") the assets used exclusively in the operation of seven Xxxxx
& Kacoo's seafood restaurants (the "Business"), and 98 shares of common
stock of Cajun Bayou Distributors and Management, Inc., a Louisiana
corporation that owns certain other assets used exclusively in the
operation of the Business;
WHEREAS, Piccadilly has historically provided those services described
in Section 2 below, together with all customary, ancillary or related
activities that are associated with or incidental to such services
(collectively, the "Services"), to the Business, and Buyer desires that
Piccadilly or one or more of its subsidiaries as may be designated by
Piccadilly, continue to provide such Services to the Business on a
temporary basis;
WHEREAS, Piccadilly is willing to provide the Services to the Business
upon the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the covenants and agreements set
forth herein, and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereto agree
as follows:
Section 1. RIGHTS AND DUTIES OF PICCADILLY.
(a) Upon the terms and subject to the conditions set forth herein,
Piccadilly agrees from and after the date hereof to provide the Services to
the Business.
(b) Buyer acknowledges and agrees that Piccadilly may, at its
election, cause one or more of it subsidiaries or third party contractors
or service providers to perform the Services.
(c) Piccadilly and Buyer acknowledge and agree that the nature, scope
and quality of the Services shall be as set forth in this Agreement and as
has been provided by Piccadilly and its affiliates to the Business prior to
the Closing Date.
Section 2. DESCRIPTION OF SERVICES. Piccadilly and Buyer agree that
Piccadilly shall provide the following Services pertaining to the Business:
(a) accounting and financial services, including maintenance of books
and records, accounting systems and payroll systems;
(b) financial reporting services, including preparation of financial
statements for internal and external uses and coordination and general
administration of any other financial reporting needs of the Business;
(c) preparation and filing of payroll tax returns under Buyer's
employer identification number;
(d) management information and system services, including computer
operations, data input, systems and programming and technical support; and
(e) such other services as may mutually be agreed upon by the parties
hereto.
Section 3. ADMINISTRATION OF SERVICES.
(a) Buyer agrees to provide the appropriate department within
Piccadilly with all data, records, files, statements, invoices, xxxxxxxx
and other information reasonably requested by Piccadilly that is necessary
or advisable to allow Piccadilly to perform the Services contemplated by
this Agreement. Buyer shall have reasonable access to all data, records,
files, statements, invoices, xxxxxxxx and other information generated by or
in the custody of Piccadilly relating to the Services provided pursuant to
this Agreement.
(b) Buyer acknowledges and agrees that the Services shall be provided
only with respect to the Business.
(c) Buyer represents and warrants that the Services will not be used
in violation of any applicable federal, state or local law or any rules or
regulations promulgated thereunder.
(d) Each party shall (i) maintain confidential and secret all
confidential information that may be disclosed by the other party in
connection with the provision of the Services hereunder, (ii) restrict
disclosure of such confidential information to those of its employees who
have a need to know such information in order to comply with its
obligations hereunder and (iii) employ the same standards of care with
respect to such confidential information as it uses to protect its own
confidential information. The obligations of this Section 3(d) shall
survive the expiration and termination of this Agreement for a period of
five years.
Section 4. COMPENSATION.
(a) Buyer shall reimburse Piccadilly for all actual costs of goods,
services or other items purchased, leased or otherwise procured from third
parties by Piccadilly for the direct benefit of the Business, to the extent
such costs are paid by Piccadilly ("Direct Costs").
(b) As compensation for the performance of the Services, Buyer shall
pay to Piccadilly a monthly fee of $10,000 (the "Monthly Fee").
(c) Piccadilly will invoice Buyer by the 15th day of each month for
the Direct Costs and the Monthly Fee provided during the preceding month.
All amounts shown on each invoice shall be due and payable on the last day
of the month of such invoice.
(d) In the event of a dispute as to the propriety of invoiced
amounts, Buyer shall pay all undisputed amounts but shall be entitled to
withhold payment of any amount in dispute and shall promptly notify
Piccadilly in writing of the basis of the dispute and the amount disputed.
Piccadilly shall provide Buyer with the records and supporting data with
respect to the disputed amounts and the parties agree to attempt in good
faith to resolve any such dispute failing which, the dispute shall be
submitted to an independent accounting firm, which shall have the sole and
exclusive authority to arbitrate the dispute, and whose decision shall be
conclusive and binding upon the parties.
(e) Any amounts owed by either party hereunder to the other party
that remain unpaid on the due date therefor shall bear interest at a rate
equal to the lesser of (i) 1% above such party's actual cost of funds or
(ii) the highest rate permitted by applicable law.
Section 5. TERMS OF AGREEMENT: TERMINATION. This Agreement shall
commence as of the date first above written and shall continue in effect
until (i) the parties mutually agree in writing to terminate this Agreement
or (ii) 30 days after receipt by Piccadilly of written notice from Buyer of
its request to terminate this Agreement. Upon termination of this
Agreement, Buyer shall be liable for all Direct Costs incurred in
accordance with Section 4 prior to termination, and for the payment of the
Monthly Fee through the end of the month following termination of the
Agreement.
Section 6. LIMITATION OF LIABILITY; INDEMNIFICATION.
(a) Piccadilly makes no representation or warranty whatsoever,
express or implied, with respect to the Services. In no event shall
Piccadilly be liable to Buyer for (i) any loss, cost or expense resulting
from any act or omission taken at the express direction of Buyer or (ii)
any special, indirect or consequential damages resulting from any error or
omission in the performance of the Services or from the breach of this
Agreement.
(b) Neither Piccadilly nor Buyer shall be liable for any loss or
damage or any nonperformance, partial or whole, under this Agreement,
caused by any strike, labor troubles, riot, act of a public enemy,
insurrection, act of God, or any law, rule or regulation promulgated by any
governmental body or agency, or any demand or requisition of any
governmental body or agency, or any other cause beyond the control of the
parties hereto.
(c) Buyer shall reimburse, indemnify and hold harmless Piccadilly
and its successors, assigns, affiliates, directors, officers, employees and
agents from and against any and all judgments, losses, damages,
liabilities, demands, actions, suits, taxes, charges, costs, claims,
expenses and disbursements (including legal fees and expenses) of any kind
and nature whatsoever that may at any time be imposed on, incurred by or
asserted against Piccadilly (including any claims against Piccadilly for
indemnification by any such person) or any such person (whether or not
indemnified by Piccadilly or any other person) in connection with any suit
or proceeding, whether judicial or administrative, relating to or arising
out of any acts or omissions performed or omitted by Piccadilly or any such
person in connection with or arising out of the performance of the Services
unless such act or omission by Piccadilly or such person constituted bad
faith, willful misfeasance, gross negligence, recklessness or a willful,
material breach of this Agreement.
Section 7. RELATIONSHIP OF PARTIES.
Nothing contained in this Agreement (a) shall constitute Piccadilly
and Buyer as members of any partnership, joint venture, association,
syndicate, unincorporated business or other separate entity, (b) shall be
construed to impose any liability as such on either of them, (c) shall be
deemed to confer on either of them any express, implied or apparent
authority to incur any obligation or liability on behalf of the other, or
(d) shall be deemed to, or in fact, create any benefit for, or impose any
obligation on the parties in favor of, any person not party to this
Agreement. Piccadilly shall at all times during the term hereof act as an
independent contractor, and none of Piccadilly's employees, subcontractors,
agents or representatives shall be considered employees of Buyer as a
result of this Agreement.
Section 8. MISCELLANEOUS.
(a) This Agreement constitutes the entire agreement between the
parties hereto with respect to the matters set forth in this Agreement.
This Agreement shall not be amended, modified or supplemented except by an
instrument in writing executed by each of the parties hereto.
(b) Each of the parties hereto shall use its best efforts to take
or cause to be taken, to the extent necessary, all actions necessary,
proper or advisable to consummate the transactions contemplated by this
Agreement.
(c) All notices and other communications hereunder shall be in
writing and shall be given by hand delivery, certified or registered mail,
return receipt requested or telecopy transmission with confirmation of
receipt to the address of each of the parties set forth opposite the
signature of such party on the signature page hereof. All notices and
communications shall be deemed given upon receipt thereof.
(d) This Agreement shall be governed by and construed in
accordance with the internal laws of the State of Louisiana without the
application of any conflicts of law principles.
(e) This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original but all of which together shall
constitute one and the same instrument.
(f) The section headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
(g) In the event that any provision of this Agreement shall be
determined to be invalid or unenforceable, in whole or in part, it is the
parties intention that such determination shall not be held to affect the
validity or enforceability of any other provision of this Agreement, which
provisions shall otherwise remain in full force and effect.
(h) This Agreement shall inure to the benefit of and be binding
upon the parties hereto and their respective successors and assigns. This
Agreement shall not be assignable by any party hereto without the prior
written consent of the other party.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the date first above written.
Addresses for Notices: PICCADILLY CAFETERIAS, INC.
0000 Xxxxxxxx Xxxxxx Xxxxxxxxx
Xxxxx Xxxxx, Xxxxxxxxx 00000
Attn: Xxxxxx X. XxXxxxx By: /S/ XXXXXX X. XXXXXXX
Name: Xxxxxx X. XxXxxxx
Title: President and Chief Executive
Officer
XXXX INVESTMENT COMPANY, INC.
0000 Xxxxxxx Xxxx, 0xx Xxxxx
Xxxxxx, Xxxxxxx 00000
Attn: Xxxxxx X. Xxxxx
By: /S/ XXXXXX X. XXXXX
Name: Xxxxxx X. Xxxxx
Title: Executive Vice President
and Chief Financial Officer
CONSENT AND WAIVER AGREEMENT
This Consent and Waiver Agreement (the "Waiver") dated as of March
10, 1999 is by and among Piccadilly Cafeterias, Inc., a Louisiana
corporation ("Piccadilly"), Piccadilly Restaurants, Inc., a Louisiana
corporation ("Restaurants" and together with Piccadilly, the "Sellers") and
Xxxx Investment Company, Inc., a Delaware corporation (the "Buyer").
W I T N E S S E T H
WHEREAS, Sellers and Buyer have entered into that certain Stock and
Asset Purchase Agreement (the "Purchase Agreement") pursuant to which Buyer
has agreed to purchase (the "Purchase") all of the assets held by Sellers
that are principally used in the operation of seven Xxxxx & Kacoo's Seafood
Restaurants, including all of the issued and outstanding shares of Cajun
Bayou Distributors and Management, Inc. (the "Business"); and
WHEREAS, the Sellers and Buyer have mutually agreed that it is in the
best interest of the Business that the Xxxxx & Kacoo's Seafood Restaurant
located in Jackson, Mississippi (the "Xxxxxxx Restaurant") be closed for
business prior to the closing of the Purchase; and
WHEREAS, Buyer has consented to the closing of the Xxxxxxx Restaurant,
and agrees to share with Sellers any and all expenses incurred by Sellers
resulting from the closing of the Xxxxxxx Restaurant; and
WHEREAS, Sellers and Buyer have agreed that the closing of the Xxxxxxx
Restaurant should in no way affect or impede the transactions contemplated
by the Purchase Agreement.
NOW THEREFORE, the Sellers and Buyer hereby agree as follows:
1. All capitalized terms not otherwise defined herein shall have the
meanings ascribed to such terms in the Purchase Agreement.
2. In accordance with Sections 6.4 and 12.2 of the Purchase
Agreement, Buyer hereby consents to the closure of the Xxxxxxx Restaurant
and hereby waives any and all breaches by either or both of the Sellers of
any of their representations, warranties or covenants contained in the
Purchase Agreement that may arise or result from the closure of the Xxxxxxx
Restaurant prior to the Closing Date.
3. Buyer also hereby acknowledges that the employees of the Xxxxxxx
Restaurant listed on Schedule A attached hereto shall, effective upon the
closure of the Xxxxxxx Restaurant, be excluded from the definition of
Business Employees as used in the Purchase Agreement, and Schedule 10.5(a)
to the Purchase Agreement is hereby deemed amended to so remove such
employees.
4. Sellers shall be responsible for any and all amounts payable to
the terminated employees of the Xxxxxxx Restaurant for accrued wages or
vacation benefits or any other payments that may be due such employees
under Piccadilly's Employee Plans or Benefit Arrangements.
5. Sellers and Buyer hereby acknowledge and agree that
notwithstanding the closure of the Xxxxxxx Restaurant, all Acquired Assets
located at, or arising from or relating to the operation of the Business
at, the Xxxxxxx Restaurant, shall be conveyed to Buyer, and all Assumed
Liabilities arising from the operation of the Business at the Xxxxxxx
Restaurant shall be assumed by the Buyer, all in accordance with the terms
of the Purchase Agreement at the Closing Date.
6. Notwithstanding paragraph 5 above, Sellers and Buyer hereby
acknowledge and agree that the Real Property Lease pertaining to the
Xxxxxxx Restaurant site may be terminated prior to the Closing Date. If
said Real Property Lease is so terminated, the Acquired Assets shall not
include said Real Property Lease, but shall include all other Acquired
Assets located at, or arising from or relating to the operation of the
Business at the Xxxxxxx Restaurant. Likewise, if said Real Property Lease
is terminated prior to the Closing Date, the Assumed Liabilities shall not
include any liabilities arising from said Real Property Lease.
7. Except as otherwise provided herein, the parties agree that any
and all fees or expenses that may be incurred by Sellers outside the
ordinary course of business as a result of the closure of the Xxxxxxx
Restaurant shall be shared equally between Buyer and Sellers. Buyer and
Sellers will use reasonable efforts to keep each other informed and to
consult with each other as such fees or expenses are incurred.
8. Except and solely to the extent affected hereby, all terms and
conditions of the Purchase Agreement are hereby confirmed and shall
continue in full force and effect.
9. The parties may execute this Waiver in any number of counterparts
each of which shall be deemed to be an original and all of which shall
constitute one and the same instrument.
10. (a) Sellers acknowledge that Buyer has been notified of a claim
(the "Claim") against the assets of Piccadilly Restaurants, Inc. in
connection with attempts to enforce the judgment (the "Judgment") rendered
in that certain action styled Xxxxx X. Xxxxxx, et al. v. Piccadilly
Restaurants, Inc. d/b/a Xxxxx and Kacoo's, et al., Civil Action No. 3:97 CV
423 LN, United States District Court, Southern District of Mississippi,
Jackson Division (the "Lawsuit"). Buyer understands that Sellers, in their
sole discretion, may appeal this Judgment or contest the enforcement
thereof, in which event the Claim may not be finally resolved or satisfied
on the Closing Date. Sellers and Buyer recognize and agree that it shall
be the sole responsibility of Sellers, in their discretion, to appeal the
Judgment or contest the Claim and that Buyer will require that the Acquired
Assets transferred to Buyer on the Closing Date be free and clear of all
liens or encumbrances securing the payment of the Judgment. However, if
Sellers have not finally resolved the Claim on the Closing Date, Buyer will
agree to accept the Acquired Assets subject to the Claim on the condition
that Sellers provide such security as may be required by Buyer and its
lender, Whitney National Bank, to assure that all asserted or threatened
liens or encumbrances arising in connection with the Judgment or the Claim
will be released and will in no way interfere with Buyer's interest in or
operation of the Acquired Assets.
(b) In addition to the indemnity provisions described in the
Purchase Agreement, and subject to the notice and defense provisions
described in Section 8.2 of the Purchase Agreement, Piccadilly shall
indemnify and hold harmless the Buyer Indemnities from, and will pay to the
Buyer Indemnitees the amount (net of any proceeds received by the Buyer
Indemnitee from insurance or any quantifiable tax benefits in the year
incurred (but giving effect to any tax detriment from receipt of
indemnification proceeds), obtained) of, any loss, liability, judgment,
damage, cost or expense (including interest, penalties, and the reasonable
fees, disbursements and expenses of attorneys, accountants and other
professional advisors) (collectively, "Losses") arising from or in
connection with the Lawsuit. Further, any Losses connected with the
Lawsuit shall not be subject to the limits on indemnity set forth in
Sections 8.3 and 8.4 of the Purchase Agreement.
IN WITNESS WHEREOF, the parties hereto have duly executed this Waiver
all as of the day and year first above written.
PICCADILLY CAFETERIAS, INC.
By: /S/ XXXXXX X. XXXXXXX
Xxxxxx X. XxXxxxx
President and Chief Executive
Officer
PICCADILLY RESTAURANTS, INC.
By: /S/ XXXXXX X. XXXXXXX
Xxxxxx X. XxXxxxx
President and Chief Executive
Officer
XXXX INVESTMENT COMPANY, INC.
By: /S/ XXXXXX X. XXXXX
Xxxxxx X. Xxxxx
Executive Vice President and
Chief Financial Officer
MANAGEMENT SERVICES AGREEMENT
THIS MANAGEMENT SERVICES AGREEMENT (this "Agreement"), dated and
effective as of March 30, 1999, is by and between Piccadilly Restaurants,
Inc., a Louisiana corporation ("Piccadilly") and Xxxx Investment Company,
Inc., a Delaware corporation ("Buyer").
W I T N E S S E T H :
WHEREAS, pursuant to the terms of the Stock and Asset Purchase
Agreement dated as of January 15, 1999 (the "Purchase Agreement") by and
among the parties hereto and Piccadilly Cafeterias, Inc., Buyer purchased
on the date hereof (the "Closing Date") the assets used exclusively in the
operation of seven Xxxxx & Kacoo's seafood restaurants (the "Business"),
and 98 shares of common stock of Cajun Bayou Distributors and Management,
Inc., a Louisiana corporation that owns certain other assets used
exclusively in the operation of the Business;
WHEREAS, Buyer has not yet obtained its liquor licenses for the five
Xxxxx & Kacoo's seafood restaurants located in Louisiana (collectively, the
"Louisiana Restaurants" and each a "Louisiana Restaurant"), more
particularly described as follows:
(i) 0000 Xxxxxxxxxx Xxxxxxxxx, Xxxxx Xxxxx, Xxxxxxxxx 00000;
(ii) 000 Xxxxxxxx Xxxxxx, Xxx Xxxxxxx, Xxxxxxxxx 00000;
(iii)601 Xxxxxxxx Xxxxxxxx Xxxxxxxxx, Xxxxxxxx, Xxxxxxxxx 00000;
(iv) 0000 Xxxxxxx Xxxxxxx, Xxxxx Xxxxx, Xxxxxxxxx 00000; and
(v) 0000 Xxx Xxxxxx Xxxx, #000, Xxxxxxx Xxxx, Xxxxxxxxx 00000;
WHEREAS, Buyer desires that Piccadilly continue to provide management
services for the Louisiana Restaurants (the "Management Services") as more
fully described in Section 2 below, on a temporary basis until such time as
Buyer is able to obtain liquor licenses for the Louisiana Restaurants; and
WHEREAS, Piccadilly is willing to provide the Management Services to
the Louisiana Restaurants upon the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the covenants and agreements set
forth herein, and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereto agree
as follows:
Section 1. RIGHTS AND DUTIES OF PICCADILLY.
(a) Upon the terms and subject to the conditions set forth herein,
Piccadilly agrees from and after the date hereof to provide the Management
Services to the Louisiana Restaurants.
(b) In furtherance of its obligations provided for in paragraph (a),
and notwithstanding anything to the contrary in the Purchase Agreement (in
particular, Section 10.5 thereof), at the Closing the five Senior Managers
and the two District Managers listed on Exhibit A hereto (collectively, the
"Managers") shall not be terminated as employees of Piccadilly and shall
continue to be employees of Piccadilly until each such person's employment
is terminated as provided in Section 6 hereto. Piccadilly shall continue
to pay each Manager the salary, and provide any benefits, that each such
Manager currently enjoys during the term of the continuation of such
Manager's employment hereunder.
(c) Piccadilly shall maintain insurance coverage covering the
Managers, including but not limited to, worker's compensation coverage and
general liability coverage, the cost of which shall be reimbursed by Buyer.
(d) Piccadilly and Buyer acknowledge and agree that the nature, scope
and quality of the Management Services shall be as set forth in this
Agreement and as has been provided by Piccadilly to the Louisiana
Restaurants prior to the Closing Date.
(e) Xxxx Xxxxxx, one of the District Managers listed on Exhibit A, is
responsible for management of the two Louisiana Restaurants located in
Baton Rouge, and is also responsible for the supervision of the Xxxxx &
Kacoo's restaurant located in Birmingham, Alabama (the "Birmingham
Restaurant"). Although Piccadilly will not be providing Management
Services to the Birmingham Restaurant, the salary and employee benefits
paid to Xxxx Xxxxxx by Piccadilly under Section 1(b) above will include, in
part, compensation for the management supervision services provided to the
Birmingham Restaurant by Xxxx Xxxxxx. Notwithstanding anything herein to
the contrary, Piccadilly and Buyer acknowledge and agree that Buyer will
reimburse Piccadilly for the full amount of any compensation, benefits or
other costs paid by Piccadilly to Xxxx Xxxxxx or as a result of Xxxx
Xxxxxx'x employment by Piccadilly during the term of this Agreement.
Section 2. DESCRIPTION OF SERVICES. Piccadilly and Buyer agree that
Piccadilly shall provide Management Services pertaining to the Louisiana
Restaurants for the benefit of Buyer as follows:
(a) the services of the five Senior Managers listed on Exhibit A at
each of the Louisiana Restaurants, each of whom will manage the day-to-day
operations of the applicable Louisiana Restaurant at which he or she was
employed immediately prior to the date hereof and the two District Managers
listed on Exhibit A, each of whom will supervise the management of the
applicable Louisiana Restaurants indicated on Exhibit A; and
(b) such other services as may mutually be agreed upon by the parties
hereto.
Section 3. ADMINISTRATION OF SERVICES.
(a) Piccadilly shall have reasonable access to all data, records,
files, statements, invoices, xxxxxxxx and other information generated by or
in the custody of Buyer relating to the Management Services provided
pursuant to this Agreement, and other information reasonably requested by
Piccadilly that is necessary or advisable to allow Piccadilly to perform
the Management Services contemplated by this Agreement.
(b) Buyer acknowledges and agrees that the Management Services shall
be provided only with respect to the Louisiana Restaurants.
(c) Buyer shall have the right to provide direction and supervision
to Managers in such manner that the Management Services will not be used in
violation of any applicable federal, state or local law or any rules or
regulations promulgated thereunder.
(d) Each party shall (i) maintain confidential and secret all
confidential information that may be disclosed by the other party in
connection with the provision of the Management Services hereunder, (ii)
restrict disclosure of such confidential information to those of its
employees who have a need to know such information in order to comply with
its obligations hereunder and (iii) employ the same standards of care with
respect to such confidential information as it uses to protect its own
confidential information. The obligations of this Section 3(d) shall
survive the expiration and termination of this Agreement for a period of
five years.
Section 4. COMPENSATION.
(a) Buyer shall reimburse Piccadilly for all actual costs incurred by
Piccadilly in providing the Management Services, including, but not limited
to the salaries of the Managers, payroll taxes, any employment benefits
such Managers receive from Piccadilly, travel expenses of the Managers, and
insurance premiums, such as general liability and worker's compensation,
to the extent such costs are paid and reasonably documented by Piccadilly
("Direct Costs").
(b) Piccadilly will invoice Buyer by the 15th day of each month for
the Direct Costs provided during the preceding month. All amounts shown on
each invoice shall be due and payable on the last day of the month of such
invoice.
(c) In the event of a dispute as to the propriety of invoiced
amounts, Buyer shall pay all undisputed amounts but shall be entitled to
withhold payment of any amount in dispute and shall promptly notify
Piccadilly in writing of the basis of the dispute and the amount disputed.
Piccadilly shall provide Buyer with the records and supporting data with
respect to the disputed amounts and the parties agree to attempt in good
faith to resolve any such dispute failing which, the dispute shall be
submitted to an independent accounting firm, which shall have the sole and
exclusive authority to arbitrate the dispute, and whose decision shall be
conclusive and binding upon the parties.
(d) Any amounts owed by either party hereunder to the other party
that remain unpaid on the due date therefor shall bear interest at a rate
equal to the lesser of (i) 1% above such party's actual cost of funds or
(ii) the highest rate permitted by applicable law.
Section 5. TERMS OF AGREEMENT: TERMINATION. This Agreement shall
commence as of the date first above written and shall continue in effect
until (i) with respect to each Louisiana Restaurant, Buyer shall have
received a liquor license for that Louisiana Restaurant, at which time the
Agreement shall terminate as to that Louisiana Restaurant; (ii) the parties
mutually agree in writing to terminate this Agreement; or (iii) 30 days
after receipt by either party of written notice from the other party of its
request to terminate this Agreement. Upon termination of this Agreement,
Buyer shall be liable for all Direct Costs incurred in accordance with
Section 4 prior to termination.
Section 6. EFFECT OF TERMINATION. Immediately upon termination of
the Agreement, whether terminated in full or terminated with respect to one
or more individual Louisiana Restaurant(s), the employment by Piccadilly of
the Senior Manager(s) of the Louisiana Restaurant(s) as to which such
termination is effected shall, in accordance with Section 10.5 of the
Purchase Agreement, be terminated. Further, the employment by Piccadilly
of each District Manager shall terminate upon the termination of this
Agreement as to all of the Louisiana Restaurants that the particular
District Manger supervises. Upon such termination of employment of the
Managers, such Manager or Managers shall become employees of Buyer, and
shall thereafter have the same rights and benefits of the Business
Employees, as that term is defined in the Purchase Agreement.
Section 7. LIMITATION OF LIABILITY; INDEMNIFICATION.
(a) Piccadilly makes no representation or warranty whatsoever,
express or implied, with respect to the Management Services. In no event
shall Piccadilly be liable to Buyer for (i) any loss, cost or expense
resulting from any act or omission by the Managers taken at the express
direction of Buyer or (ii) any special, indirect or consequential damages
resulting from any error or omission by the Managers in the performance of
the Management Services or from the breach of this Agreement.
(b) Neither Piccadilly nor Buyer shall be liable for any loss or
damage or any nonperformance, partial or whole, under this Agreement,
caused by any strike, labor troubles, riot, act of a public enemy,
insurrection, act of God, or any law, rule or regulation promulgated by any
governmental body or agency, or any demand or requisition of any
governmental body or agency, or any other cause beyond the control of the
parties hereto.
(c) Buyer shall reimburse, indemnify and hold harmless Piccadilly
and its successors, assigns, affiliates, directors, officers, employees and
agents from and against any and all judgments, settlements, losses,
damages, attorneys' fees (both defense fees and statutory attorney fees to
prevailing parties), liabilities, demands, actions, suits, taxes, charges,
costs, claims, expenses and disbursements of any kind and nature whatsoever
that may at any time be imposed on, incurred by or asserted against
Piccadilly (including any claims against Piccadilly for indemnification by
any such person) or any such person (whether or not indemnified by
Piccadilly or any other person) in connection with any suit or proceeding,
whether judicial or administrative, relating to or arising out of any acts
or omissions performed or omitted by Piccadilly or the Managers or any such
person in connection with or arising out of the performance of the
Management Services unless such act or omission by Piccadilly or the
Managers constituted a willful, material breach of this Agreement.
Section 8. RELATIONSHIP OF PARTIES.
Nothing contained in this Agreement (a) shall constitute Piccadilly
and Buyer as members of any partnership, joint venture, association,
syndicate, unincorporated business or other separate entity, (b) shall be
construed to impose any liability as such on either of them, (c) shall be
deemed to confer on either of them any express, implied or apparent
authority to incur any obligation or liability on behalf of the other, or
(d) shall be deemed to, or in fact, create any benefit for, or impose any
obligation on the parties in favor of, any person not party to this
Agreement. Piccadilly and the Managers shall at all times during the term
hereof act as independent contractors, and none of Piccadilly's employees,
subcontractors, agents or representatives or the Managers shall be
considered employees of Buyer as a result of this Agreement.
Section 9. MISCELLANEOUS.
(a) This Agreement constitutes the entire agreement between the
parties hereto with respect to the matters set forth in this Agreement.
This Agreement shall not be amended, modified or supplemented except by an
instrument in writing executed by each of the parties hereto.
(b) Each of the parties hereto shall use its best efforts to take
or cause to be taken, to the extent necessary, all actions necessary,
proper or advisable to consummate the transactions contemplated by this
Agreement.
(c) All notices and other communications hereunder shall be in
writing and shall be given by hand delivery, certified or registered mail,
return receipt requested or telecopy transmission with confirmation of
receipt to the address of each of the parties set forth opposite the
signature of such party on the signature page hereof. All notices and
communications shall be deemed given upon receipt thereof.
(d) This Agreement shall be governed by and construed in
accordance with the internal laws of the State of Louisiana without the
application of any conflicts of law principles.
(e) This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original but all of which together shall
constitute one and the same instrument.
(f) The section headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
(g) In the event that any provision of this Agreement shall be
determined to be invalid or unenforceable, in whole or in part, it is the
parties intention that such determination shall not be held to affect the
validity or enforceability of any other provision of this Agreement, which
provisions shall otherwise remain in full force and effect.
(h) This Agreement shall inure to the benefit of and be binding
upon the parties hereto and their respective successors and assigns. This
Agreement shall not be assignable by any party hereto without the prior
written consent of the other party.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the date first above written.
Addresses for Notices: PICCADILLY RESTAURANTS, INC.
0000 Xxxxxxxx Xxxxxx Xxxxxxxxx
Xxxxx Xxxxx, Xxxxxxxxx 00000
Attn: Xxxxxx X. XxXxxxx By: /S/ XXXXXX X. XXXXXXX
Name: Xxxxxx X. XxXxxxx
Title: President and Chief Executive
Officer
XXXX INVESTMENT COMPANY, INC.
0000 Xxxxxxx Xxxx, 0xx Xxxxx
Xxxxxx, Xxxxxxx 00000
Attn: Xxxxxx X. Xxxxx
By: /S/ XXXXXX X. XXXXX
Name: Xxxxxx X. Xxxxx
Title: Executive Vice President
and Chief Financial Officer
ALL EXHIBITS AND SCHEDULES INTENTIONALLY OMITTED
